Being your own boss, whilst rewarding, is far from simple. Especially considering the current state of the industry and widespread confusion after the government back and forth.
With substantial industry changes seemingly put on hold, now could well be the time to take stock of your business and ensure everything is in place so you can tackle whatever the future holds with confidence.
Whether it’s done once a year or at regular intervals throughout, it’s important to draw up your own responsibilities checklist to help keep your business on track. January can be the ideal time for this, after you have filed your Self Assessment tax return and are still, hopefully, on a roll with your admin.
So, what key factors should you consider, at least once a year, if you’re self-employed?
Assessing your business performance regularly might go without saying, but it’s an easy task to put off in favour of other deadlines. Whilst you might feel you have a general overview of the performance of your business, it’s easy to miss things if it’s not all laid out in front of you. Even those armed with figures from bookkeeping software or their self assessment tax return need to take a moment to assess the bigger picture.
You should know how your sales, costs, and profit compare with previous years by assessing the following:
Keeping a close eye on your sales, costs, and cash flow is essential to ensuring your business thrives. Having a reliable financial record-keeping system makes it that much easier.
There are a range of systems out there that you can regularly update with accurate figures and that reveal, at the touch of a button, your business’s true financial health. Is your accounting system up to the job or is it time for an upgrade? A better accounting system could improve your financial record keeping and relieve much of your administrative burden.
The same applies to your other key business systems, ask yourself whether they remain fit for purpose. Do you need to improve or update them too?
All of your systems should function well, save you time, effort, and money. Systems that successfully do this will enable you to spend more time taking care of things that are critical to your success, such as managing customer relationships, communication, controlling your costs, and generating new sales.
Managing tax comes up time and time again as a bone of contention for the self-employed. If self assessment continues to prove a headache each January as you battle to file your Self Assessment tax return before the online-filing deadline, you aren’t alone.
You should aim to ensure that your business is as tax efficient as possible, which means claiming all of your available allowances and reliefs. The same applies to your own earnings, of course.
Seeking tailored tax advice could save you a lot of money, consider reaching out for support from tax industry experts and look into the technology available to help relieve you of your tax management woes.
Do you know how much do you pay in bank charges every month or year? It may well be worth having a look at how you could reduce any interest payments and business banking fees/charges.
Although changing to another bank is not as easy as it used to be, you might be able to get a cheaper deal from another bank. Once a year, at least, you should compare your current banking deal with those provided by others. You can also arrange to speak to someone at your bank (preferably at your local branch) to find out how you could save money and get more from your relationship.
If you’re still using your personal bank account, by setting up a separate business bank account you can more easily keep track of your business income and expenditure, making keeping on top of your finances that much easier.
You should update your business plan every year in order for it to continue to be a useful tool in pushing your business onwards and upwards.
As part of updating your business plan, here are a few key factors you should consider:
Once updated, dig out your business plan at least every six months to remind yourself of what you’re aiming to achieve and how.
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