Having your own business can be fantastic: lots of creative ideas, a new found energy and positivity, an opportunity to make some great business decisions with some financial reward!
Of course, profit is vital to the success of your business as it helps to fuel growth. This leads to sustainable cash flows, and without them a business would simply fail.
Our straightforward guide below offers some tips on how you can keep your business productive.
Driving profit
Having sustainable profits in your business, increases its value. If you have a poor profit level this will hamper your attempts to plough money back into your business and keep it growing. It also means it will be harder to attract finance into the business from outside sources, and the knock on effect could mean that you will have less investment in new products, new technology, and even, new staff.
We cant stress enough how important it is to have a good working relationship with your bank, as maintaining regular dialogue with them means they will have a better understanding of your business needs, and be able to provide appropriate support and advice when you need it.
Determining your profit level means keeping reliable and accurate accounts.
Ask yourself, these simple questions:
- Do I have a strong business proposition?
- How much is my business in profit?
- Which areas of the business are bringing in the most profit, and which are not?
- Is this the perfect opportunity to review my 3rd party relationships?
- Are there areas of the business where we could be more cost effective?
- What are my competitors doing? Are we being competitive?
Streamlining and cost saving
In asking yourself these questions you can start to identify where the waste in your business is coming from, and closely manage your costs. Look at making savings with the type or number of suppliers you use, and whether you can buy cheaper raw materials. Limit and reduce overheads and your tax liabilities where possible. Look at how you use your premises – achieve lower rents by negotiating longer contracts, and if you have unused office space, maybe rent it out or promote it as a conference facility? Remember, it is a question of balance, so do not let your cost-cutting come at the expense of driving down the quality of your products and services.
How Can Lawrence Grant, Chartered Accountants help you?
If you are looking for assistance with any financial, fiscal and legal aspects of running a business and the support of a trained team of experts that can help you to succeed, we will review and make recommendations in the following areas:
Contact us today on +44 (0)20 8861 7575, or email us at lgmail@lawrencegrant.co.uk and take advantage of our FREE initial consultation.
Paul Atkinson
Lawrence Grant, Chartered Accountants
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