Owning a business is a highly rewarding way to earn a living. You can see the results of your hard work in real time as the business grows and, hopefully, your income grows with it.
Of course, as this business provides income for you and your family, you’ll understandably want to make it work as effectively as possible.
That’s why it’s useful to look at ways that can take your business to the next level, whatever that means to you.
Here are a few things to think about that can help you turn a “good” business into a “great” one.
Boost your cash flow
The bottom line of your business is the most important part of the entire enterprise. That’s why your cash flow is the first thing to consider when you want to boost your business.
Having a healthy cash flow is crucial to your business for a whole host of reasons. It ensures you’re able to settle any debts you have, while simultaneously providing funds to reinvest in the business and grow it even further.
To boost your cash flow, you could first consider methods such as reducing your expenditure and any unnecessary spending. This frees up business cash for the things that are more important to you.
Once you’ve done that, you could think about introducing incentives and discounts for customers to encourage sales in the short term.
You could also think about injecting capital into your cash flow. This could be money raised from shareholders, or even a director’s loan that you make from your personal savings.
Arguably, the best way to improve cash flow is to create a cashflow forecast. This gives you a visual picture of where the money in your business is going and allows you to model what would happen in various scenarios.
A financial planner can be an invaluable resource here, providing you with a forecast that can help you make incisive decisions about your cash flow.
Comprehensive tax planning
Working to improve your cash flow is a great way to make the most of your money. But all that hard work can end up being for very little if you haven’t looked at ways to mitigate tax in your business.
There are various strategies that can help you to reduce your business’s tax bill, including:
- Increasing your pension contributions, both for yourself and your employees. This can help you to reduce your National Insurance payments, and reduce your Corporation Tax liability as pension contributions are typically an allowable business expense.
- Drawing income from your business tax-efficiently. For example, you can take part of your salary in the form of dividends, meaning you’ll pay Dividend Tax rather than Income Tax and be able to make the most of the tax-free Dividend Allowance.
- Saving and investing business money through ISAs. By investing in ISAs, your interest and investment returns will be free from Income Tax and Capital Gains Tax.
Tax is notoriously complicated and the right strategies for you will depend on your business’s specific circumstances. Make sure you speak to an expert to find the most appropriate methods for you.
Protect your business from the unexpected
Emergencies and unexpected events can happen at any time. That’s why the best businesses are the ones that are protected against these moments before they strike.
So, you may want to consider the protection options available to your business, so that your company is covered in these circumstances.
Examples of cover you may want to consider include:
- Key person insurance, paying a lump sum to your business if a key person who you rely on dies or becomes terminally ill.
- Shareholder protection, giving you money to buy back the shares of a business partner who has died or become terminally ill.
- Business loan protection, helping to cover the costs of business debt if you or one of your business partners dies.
There are many other events that could befall your business, some of which you may never have thought about. It can be worth seeking professional advice to make sure you adequately protect your business.
Improve efficiency and productivity
Making your business more efficient and your employees more productive can be tricky, but it can pay dividends if you manage it correctly.
Give your business practices a thorough inspection and see whether there are parts of the business that don’t function as efficiently as you’d like.
It could be wasted time in your manufacturing process, all the way down to spending too much on office supplies. Either way, reducing time and costs can streamline your process, ultimately saving you money.
Another area of focus could be to build a healthy and functional relationship with your employees. Employees who are happy where they are will be far more willing to work hard for you.
Indeed, this effect is backed by research. A study by the University of Warwick found that employees were 12% more productive in their roles after being shown a comedy movie clip or being given free chocolate, drinks, and fruit.
It’s unlikely that you’ll make your employees care as much about your business as you. Even so, you can still find ways to incentivise your employees so that they’re happy and productive in their roles.
Work with a professional
There’s plenty you can do on your own to improve your business. But sometimes, the best course of action is to work with a professional who can provide bespoke financial advice that’s specific to your needs.
If you’d like to find out how working with an experienced financial planner can help you to boost your business, please get in touch with us at LightSide Financial Planning.
We have years of experience in helping business owners like you to achieve what they want from their companies, taking their endeavours to the next level.
Email firstname.lastname@example.org or call 0151 372 0161 for more information.
This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.