Finance

From tips on handling cashflow to obtaining government grants and setting up a credit control system; our finance section contains everything you need to know about raising investment and managing your small business money.

Selling a Business: What you Need to Know

Selling a Business: What you Need to Know

As a business owner, selling a business can simultaneously be one of the most stressful, liberating, bittersweet and potentially exhilarating experiences of your life. It should not be taken lightly – the process of selling a business is tricky, and introduces all sorts of variables which could scupper the whole process at any point. This article is intended as a step-by-step guide to the sale process for business owners. We cover how to determine whether the time is right to sell, how to increase your business’ value prior to the bidding process, the sale process itself, and how to choose a buyer and complete the deal. Read on to find out more. How do I know whether the time is right to sell? Ask yourself these questions: Have I planned ahead? Selling a business requires careful planning ... »

A Guide to Finance for Non-financial Managers

A Guide to Finance for Non-financial Managers

Learning how to survey and manage your financial position is perhaps the most important part of running a successful business. Whatever your background, you will need to know how to collect figures and use them to establish your performance, your problems, and your opportunities for growth. This guide will help you to manage your profits and losses plus your cashflow and profitability, by carefully preparing balance sheets and realistic budgets. How do I manage my profits and losses? You need to compose a profit and loss statement. This records all the sales, expenses, costs, profits and losses for the previous ‘accounting period’ (commonly one year) , as well as any tax provisions. It gives you a picture of your trading performance, and allows you to identify any growth or problem areas. ... »

How to Maximise Profit: Business Owners Share Their Secrets

How to Maximise Profit: Business Owners Share Their Secrets

When running a small business, making a profit is vital to your existence. A constant challenge for any enterprise, it probably serves as the most fundamental thing you strive for as a business. With only half of small businesses reaching their fifth birthday, we’ve gathered insights from some of the country’s top small business owners on keeping lean, maximising profits and avoiding costly mistakes. 1. Keep it lean “I think that it’s really about scrutinising spend to some degree. It’s amazing how creative you can be with quite a small budget, and I think one of the things that happens to large businesses is that they lose sight of the ability to do that. I’m always really looking constantly into how to get more value out of the things that we’re doing – particularly in marketing.” ... »

Small Business Finance: What you need to know

Small Business Finance: What you need to know

For any business, initial funding is a crucial element of success, but raising finance will almost certainly be the most difficult element of starting and running a business. Thankfully, you have an array of options open to you when it comes to raising finance. Before proceeding to raise finance, you should first ensure your business plan is economically sound. If it is, you should be able to build a solid financial base if you know what you are doing. This article should serve as an introduction to financing your business. It will cover how to assess your funding needs, then explore the multitude of different funding options – exploring your options for external investment, bank finance, and other finance options. How do I know how much finance to seek? To identify your funding needs, fol... »

How to Charge Interest on Late Payments

How to Charge Interest on Late Payments

Late payments are something to be avoided – they can halt your cashflow and, ultimately, stymie your business practices. Charging interest on late payments can be a good way of counterbalancing any cashflow difficulties and persuading debtors to pay up. Your right to collect interest on late payments is protected by law, and customers who refuse to pay interest can face legal action – though legal recourse should always be a last resort. This guide will help you: Establish whether and when to charge interest. Calculate the amount of interest owed. Persuade customers to pay. Should I charge interest? Remember that the interest you collect may not be worth the drawbacks that doing so will incur, especially if the debt amounts to an insignificant sum. Ask yourself the following three question... »

Planning Your Business Exit: What You Need to Know

Planning Your Business Exit: What You Need to Know

Aside from starting up, how you handle your exit is possibly the most important and tricky stage of your life as a business owner. Too many owners spend years carefully growing their business – only to mess up their exit plan and see their hard work go to waste. This article is intended as an introduction to exits for business owners, and should be a helpful starting point when putting together an exit plan. We cover how to plan for an exit and set your objectives and the different ways you can actually exit a business. You will then learn how to perform specific types of exit, namely trade sales, management buy-outs and handing over the reins to a family member. How should I plan for an exit? Start early. When you started your business, it’s likely you had an eventual exit in mind, ... »

Basic Budgeting for Your Small Business

Basic Budgeting for Your Small Business

When starting a business your head is often filled with grandiose dreams of becoming the new leader in your sector or changing the way the market works with your offering – it is unlikely that the prospect of drawing up a budget was what excited you about becoming an entrepreneur. But budgets are absolutely crucial in keeping control of your business and ensuring you have a realistic roadmap for success. This article will provide you with an introduction to creating a budget – we cover sales, costs and cash budgets, and how to convert these into a projected balance sheet. Finally, we examine what to do when your actual figures differ from predictions, and the steps you can take to address this. How do I draw up a sales budget? A sales budget essentially predicts how much you expect to sell... »

How to Float Your Company

How to Float Your Company

Unlike floating on a lilo there’s little relaxation to be had when floating your business. The process can be simultaneously exhilarating and terrifying, and unless you get it right, could see you spending vast amounts of time and money. You should always seek professional advice when planning a float. However, it doesn’t hurt to understand the basics. This guide will help you decide whether floating is a good option, choose a market, appoint advisers and manage the process. What are the benefits to floating my company? There are a number of different benefits that come with floating a company. One of the main reasons for floating your business is to raise capital. Floatation often involves the creation of new shares, the purchase of which can bring in much needed cashflow, and help offset... »

How to Implement a Cost Control System in Your Business

How to Implement a Cost Control System in Your Business

Although it might be a painstaking process, assessing your business costs and implementing a cost management system is worth it. Smart cost control can bring immediate benefits to your company, as well as lay the foundations for greater efficiency going forward. But it is important to cut costs wisely – only slashing away here and there will just bring about worse quality and poor morale. Read on for comprehensive information on how to properly introduce a cost control system into your business, and how to avoid some common pitfalls. What are my first steps in cost control? Before you look at cost-saving measures, your first step in controlling your overheads is to look carefully at what you’re currently spending. Start by identifying your ‘cost centres’. Cost centres are the parts of your... »

A Small Business Guide to Credit Control

A Small Business Guide to Credit Control

As a small company with limited resources, a late-paying customer can represent a cashflow nightmare. You need to have stringent controls in place if you plan to extend credit to customers; if you have a lax credit policy, it could spell the end of your business as unpaid invoices reduce your ready cash to zero. This article explains how to develop a proper credit control policy for your business. We cover how to check a customer’s credit and how to decide how much to lend them, then move on to everyday systems for credit control. You will also learn how to chase up debtors and late payers successfully, and how to deal with the often tricky scenarios posed by dealing with larger companies. How do I check a customer’s credit? Before extending credit to a new customer, it is important to che... »

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