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Business Year End Tips & Tricks

The year is nearly done and we hope that it has been a successful one for your company and that you are excited about 2019. To prepare for the new year ahead, there are a few must-dos you need to look at that will ensure you don’t overlook anything and keep you and your company on track in the upcoming year.

Take Account of Your Accounts

Make sure to follow up on all outstanding accounts. If you have many accounts payable that are overdue by 90 days or more, consider hiring a collection agency to help. Write off bad debt and then close your books for the year.

Make sure that all expenses are entered into your accounting system and that things are recorded and classified properly to avoid any possible upsets in the next financial year.

Stay Up to Date on Your Tax Records

For sole proprietors and simple partnership businesses, the biggest benefit of staying up to date on tax records is that you know where you stand financially. You can make the maximum contributions to ensure you qualify for the maximum allowable tax deductions in areas such as retirement funds and charities. Accurate financial statements guarantee preparedness when compiling your tax returns for the next tax season.

Performance Reviews

There are four areas of review you should look at within your company at the end of every year.

Firstly, you would need to review your company’s performance. This means assessing how your company did with regards to revenue, gross margin and profit, maintenance of expenses as well as the strategies your company has used internally over the course of this past year. It is important to review such strategies as it equips you for the upcoming year and its challenges.

Make sure to focus on what goals you had that went further than just financial performance. Did you achieve everything on your company goal list? Did the company expand? Did you launch a new product? If not, what can you change to make sure 2019 is more successful?

Second, you would need to review the company’s external relationships. Often, your company will establish relationships with vendors, partners and/or customers, the end of the year is ideal to review these relationships that are vital to your success. But don’t forget that your vendors, partners and/or customers may be doing the same and you need to establish if the relationship you have with them is beneficial, not only to you, but to them as well. Business is only continuous if the relationship is mutually beneficial.

Thirdly, the end of the year is often used to review employee performance. Yes, we know, how can you only assess performance once a year?! Well, we feel strongly that employee performance reviews should be done more frequently, however, it is appropriate to assess performance at the end of the year, rather than at the beginning. You should measure their accomplishments against their goals to accurately review their performance.

Finally, you’ll want to take a step back and review your own performance. How did you do with regards to your personal and business goals this year? How will you take your personal performance to the next level in the new year? Should you hire a business coach? Have you completed the training you signed up for at the beginning of the year? This review will help you better yourself for your company in the new year and help you establish a plan for success in 2019.

With all of this in mind, remember you can contact The Finance Team which will provide you with a part time or interim Financial Manager that can assist you with the year end rush to keep your house in order. We hope our tips and tricks will benefit you, your employees, your clients and your company in 2019!

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November 30, 2021 / No Comments /  

Developing A Business Model That Works

Article by entrepreneurmag.co.za

What’s the first step in figuring out how to execute your big idea? Creating a working model for your business.

We’ve all been brainwashed into thinking that the best way to do this is to sit behind our desks and write a long, detailed business plan. You know the kind: It starts with a fancy cover and your mission statement, then describes your team, market, product, competition, and so on.

Most entrepreneurs spend a lot of time and resources writing their plan. Too often, they get feedback from all the wrong people. Their friends and family want to support them, but they’re telling the entrepreneurs only what they want to hear — that they have come up with the next Google or Apple or Tesla (keep in mind, none of this feedback is coming from customers).

By the time the entrepreneur gets to the last section in the business plan — the financials — he’s totally sold on the idea. Sometimes the financial section is left unfinished or dropped entirely as the business is launched.

And why not? We’re passionate. We’re committed. We know we can’t fail. So what are we waiting for? Let’s go!

Here’s the problem: Most entrepreneurs change their business model six times when working through the financial section of their plans. While running the numbers, they identify key distinctions with regard to income and expenses. They gain a deeper understanding of what it will take to break even and how to achieve free cash flow. As a result, they come up with better-informed strategies for attaining their desired financial outcomes.

The most important part of the initial business planning process, and the one people most often neglect, is getting your numbers to tell a story that makes sense for you and your investors. If you start at the beginning of the plan only to learn that your assumptions about the business don’t add up once you reach the end, you’ve lost valuable time and money.

Regardless of whether you’re in startup or growth mode or moving to the next stage of your business, mistakes can be costly, so here’s what I recommend:

1. Start with the last page first

Once I have a basic understanding of what I’d like to build, the market, my target customers, the busi­ness opportunity, and the product, I dig right into the numbers and create a simple one-page spreadsheet that clearly identifies how the money flows. Basically, I write business plans backward. I’ve learned that once the numbers tell the story you want, the rest of the plan will write itself.

2. Don’t wait

Don’t make this process more difficult than it needs to be. Limit your model to one page. Create the simplest, most basic spreadsheet you can that identifies income, expenses, breakeven, cash flow, and the capital required to achieve your outcome. Use conservative assumptions, and don’t rely on best-case scenarios.

3. Get out of the office

You’ll learn more about your business by getting into the market than you ever will sitting behind a desk. At least 50 percent of your time should be outside the office gathering information that can be applied to your plan. That means contacting industry insiders to learn more about the market, talking to prospective customers about their needs, and testing your competition’s products and services.

4. Be careful who you listen to

When we have an idea we passion­ately believe in, we’re convincing. It’s easy for our family and friends to tell us we have a winner on our hands because they want to be supportive.

But when you’re modeling your busi­ness, the people whose feedback matters most are current and potential customers. Listen to what they have to say and apply what you learn to your model. Let their feedback, and not your enthusiasm, sway your projections.

5. Don’t throw out negative feedback

Sometimes it can be difficult to absorb negative feedback in a constructive frame of mind because we’re so close to our projects and have so much on the line. We start rejecting and deflecting feedback that isn’t in line with what we believe.

But honest, educated feedback is like gold — use it to open your mind and ask tough questions about your assumptions. You must be obsessively committed to asking what you can learn from this feedback and how you can apply it.

This is especially important for people entering new markets where they don’t have prior experience. Getting feedback from others who’ve lived in the space will add to your perspective. Sometimes you’ll learn that there are things you don’t know as a newcomer that would significantly impact your financial results.

In fact, this holds true throughout your business’s lifetime. The entrepreneurs I know who’ve built the most successful and thriving businesses are obsessed with getting constant feedback from the marketplace and adapting their businesses based on evolving market needs.

6. Be open to what the numbers tell you

The worst thing you can do is try to manipulate a model to match your assumptions. You need to approach your financial model with a completely open mind.

Recognise that it will probably take longer than you ini­tially thought to get to market, generate revenue, create profits, and accumulate the cash flow you need to operate and further invest in the business. By being open, you’ll be able to make distinctions, apply them to your business, and set yourself on a path to success.

You need to be clear on where you want to go and put a simple and adaptable plan in place to help you get there. The clearer your vision is upfront, the easier it will be to back a plan to help you get there. Being obsessed with customer feedback will enable you to tweak strategy in a way that evolves with the market and helps keep you on top of the competition.

Article by entrepreneurmag.co.za

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November 6, 2021 / No Comments /  

Why Stress Can Actually Be Good For You

Article by entrepreneurmag.co.za

For years we’ve been told how unhealthy stress can be and how important it is to manage our stress. Turns out, everything we thought we knew about stress might actually be wrong.

As a high-performing entrepreneur, there are few things more irritating than being told to work less and manage your stress. You’re building a business, which by its very nature requires a lot of time and is stressful.

Here’s the good news. Health psychologist and author of the best-selling book The Upside of Stress: Why Stress Is Good for You, and How to Get Good at It, Kelly McGonigal, has one mission: To help people be happier and healthier. For many years this meant sharing the message that stress makes you sick. It increases the risk of everything from the common cold to cardiovascular disease. Basically, she turned stress into the enemy.

But thanks to some ground-breaking studies, Kelly changed her mind. As it turns out, stress doesn’t kill you. Thinking that stress will kill you is the real killer.

Don’t view stress as harmful

Kelly’s opinion of stress started shifting after a ground-breaking study in the US tracked 30 000 adults for eight years. At the start of the study, participants were asked how much stress they had experienced in the last year, and if they believed stress was harmful to their health. They then used public death records to find out who died.

Here’s the bad news: People who experienced a lot of stress in the previous year had a 43% higher chance of dying. But  that was only true for the people who also believed that stress is harmful.

People who experienced a lot of stress but did not view stress as harmful to their health were no more likely to die than people with absolutely no stress in their lives. In fact, the focus group who had experienced stress but didn’t view it as harmful actually had the lowest risk of dying of anyone in the study.

Change your response to stress

Other studies have revealed that changing your mind about stress can change your body’s response to it. You can make stress good for you. In one Harvard study, participants were placed in a stressful situation but told that the stress response was good and would help them cope with the situation. Briefed that all the physical signs of stress were helping them to stay focused and perform at their peak — including a heightened heart rate — the participants had a different physiological reaction to someone who believes their stress response is bad.

In a typical stress response, your heart rate goes up and your blood vessels constrict. Constricted vessels are a factor in cardiovascular disease; chronic stress is sometimes associated with heart attacks. It’s not healthy to be in this state all the time.

But in the study, when participants viewed their stress response as helpful, their blood vessels stayed relaxed. Their heart was still pounding, but their cardiovascular profile looked more like what happens in moments of joy and courage. Over a lifetime of stressful experiences, this one biological change could be the difference between a stress-induced heart attack at 50 and living well into your 90s.

Stress also releases oxytocin, which fine-tunes your brain’s social instincts. It primes you to do things that strengthen relationships by making you crave physical contact with your friends and family, enhancing your empathy, and making you more willing to help and support people you care about. So, when oxytocin is released in the stress response, it’s motivating you to seek support.

How will knowing this side of stress make you healthier? Oxytocin also acts on your body. One of its main roles is to protect your cardiovascular system from the effects of stress. It’s a natural anti-inflammatory that also helps your blood vessels stay relaxed during stress. It even helps heart cells regenerate and heal from any stress-induced damage.

Pulling it all together

The harmful effects of stress on your health are not inevitable. How you think and act can transform your experience of stress. When you view your stress response as helpful, you create the biology of courage. And when you choose to connect with others under stress, you can create resilience.

Stress gives us access to our hearts, from the compassionate heart that finds joy and meaning in connecting with others, and to the pounding physical heart, working so hard to give us strength and energy. When you view stress this way, you’re not just getting better at it, you’re actually making a profound statement that you trust yourself to handle life’s challenges and that you don’t have to face them alone.

Article by entrepreneurmag.co.za

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October 26, 2021 / No Comments /  

Here’s What Jeff Bezos Prefers To Work-Life Balance And Why You Should Live By It

Article by entrepreneurmag.co.za

Amazon is known for building a culture that values hard work. So much so that the organisation has received criticism from current and former employees for having to work on Thanksgiving, or even when ill.

When asked about Amazon’s work-life balance, Jeff Bezos remarked that he ascribed to the phrase “work-life harmony” instead.

Here’s how hard-charging business people can maintain energy at home and at work without burning out by finding work-life harmony in place of work-life balance.

Measure work and home focus as a matter of energy instead of time

It isn’t about how many hours you spend at home or at work; it’s about the energy you bring to both parts of your life. If you enjoy working long hours, and that helps you to feel present while at home, then by all means continue.

This is a fundamental principle in Bezos’s theory of dividing one’s time between work and life. Because Bezos loves what he does, he finds energy from accomplishing his work in a manner that works well with his notoriously high standards.

As many can attest, our emotions bleed into all areas of our life. When you can gain energy from doing good work, it can help to propel you to be more successful in your life outside of work. Conversely, when things aren’t right at home, it can be difficult to find the energy to do your best work in the office. A central precept of work-life harmony is living such that both the professional and personal aspects of our life energise us to be our best at home and in the office.

This does not necessarily mean that we should spend our time in a balanced way, as the phrase “work-life balance” implies. Rather, we should spend our time in such a way that we are our best selves. In so doing, we will be better people on the whole.

Build a flexible work-life schedule

Just as different people will amass different levels of energy from work and life outside of work, different people will find they are most productive at different times of the day. The 9-5 work culture that has existed for decades is really shifting now. Most modern offices allow some form of flexible work, which means you have the ability to set your own hours to some degree.

Experiment with working at different times of the day to find the schedule the helps you to be most productive. In so doing, you’ll have more time to do your best work, and more energy to spend with loved ones as a result of increased productivity.

Know when to say “no”

We tend to think that taking on as many projects as possible is a sign of a good professional. But being busy is not the same as making an impact. To do your best work, you’ll need to prioritise projects that you know you can add value to.

Spinning your wheels is demoralising. Look for projects in which you can easily enter a “flow state” where hours melt away. This is the environment in which you are doing your best work, and are happy to be doing the work itself. It is in moments of flow that we often feel most productive, and even fulfilled. Therefore, it is after moments of flow that we tend to feel guilt-free about enjoying quality time with loved ones while unplugging from work.

Communicate commitments

If you’re approaching a time-consuming work project, communicate that to the important people in your life. Otherwise, they may think you are avoiding them due to a more insidious reason.

Providing those you love with a glimpse into your professional commitments can also help them to help you. If a good friend knows it will be difficult for you to communicate for a few weeks, they will know to pause conversations so as not to burden you with having to reply to texts or emails.

Similarly, a partner who knows that you are responsible for delivering an important project may be able to rearrange their schedule in order to better support you in the short term.

Conversely, if family commitments will prevent you from working at full capacity for a certain period of time, set the right expectations with colleagues. A good workplace is one that is flexible to the realities of employees’ personal lives. Managers who care about the well-being of their people are usually willing to help employees take care of personal commitments.

Adapting to a changing work life

Work no longer happens between the hours of 9 AM and 5 PM, Monday to Friday. Work happens Saturday mornings, and late Friday nights. It happens on vacation, and during graduations. The idea of work-life balance suggests that there should be an even split between working and non-working hours.

In reality, those who have undertaken ambitious careers should aim for work-life harmony, a lifestyle in which both aspects of life give you the energy to be your best self as frequently as possible.

Article by entrepreneurmag.co.za

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October 17, 2021 / No Comments /  

7 Skills Every Entrepreneur Needs To Adopt Today

Article by entrepreneurmag.co.za

For some people, becoming an entrepreneur is as easy as stepping off a bus. They have a big idea, they bring it to life, they hire employees and the next thing they are in a building smothered in branding and living the business dream. For others, the idea and the passion are there but they are unsure as to how they can make these into a sustainable reality. Entrepreneurial spirit isn’t like instant coffee – you don’t add ideas and suddenly get all the skills you need to thrive.

Want to know what skills can help you build confidence and your business? Here are seven…

1. Believable vision

Make sure that your vision is believable and achievable. It has to live in the realms of possibility, not as a blue-sky idea that looks good on paper but wouldn’t work in reality. You need to be able to live this vision so make it realistic and achievable. This will not only keep you on track, but your employees as well.

2. Be inclusive

You need to ensure that every person who works with you feels as if they are part of your vision and understand it. They need to relate to where the business is going and how it plans to get there. Many leaders don’t understand why employees are not engaged with their business and it’s because many of them don’t actually understand what the business does.

3. Communication is critical

If you don’t have fantastic communication skills, then now is the time to hone them. When it comes to building employee morale, commitment and engagement, nothing works as effectively as constant communication. The same applies to client relationships. You need to repeat the vision and ethos of the company at every opportunity and you need to be part of the team that does this communication.

4. Be visible and transparent

You are communicating, now you need to make that communication genuine by being both open and clear. People respond incredibly well to transparency. They feel as if they are part of something that recognises their value and contribution and it fosters a more inclusive company culture. Often toxic cultures come about thanks to a lack of communication and visibility. People know when things are being kept secret and react negatively to it, regardless of whether they’re an employee, a customer or a manager.

5. Be practical

You aren’t going to build an empire in a fortnight so focus on a realistic and practical business strategy that has clear benchmarks and even clearer goals. Communicate these with the company and keep everybody on the same page. Practical and achievable means long-term success.

6. Build opportunities

As people become immersed in your company and part of its growth they will also need opportunities to grow. You need to tie their careers to the business and create opportunities for them.

7. Be human

It takes people to build a culture, a company and a future. It’s essential that you are human in your interactions and your treatment of others. The impact that a down to earth and authentic attitude can have on a company is extraordinary.

Article by www.entrepreneurmag.co.za

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October 3, 2021 / No Comments /  

It’s Vital To Your Business Success: How To Manage Your Budget Better

Article by entrepreneurmag.com

A budget is or should be a part of your business plan. It is one of the major control methods to make sure your plan is implemented rather than ignored.

I agree that there are some very successful businesses that operate on a seat-of-the-pants basis, but there are a lot more trying to do so but instead floundering around in the dark.

Unless you are gifted with unerring judgement and great insight you are likely to achieve more success by working to a plan and budget.

Budgets are often prepared by financial managers and tend to focus on operating and capital expenditure rather than sales, purchases, inventory and debtors targets. A better approach is to start by agreeing what performance your company would like to achieve for all key areas.

The sales budget could be a separate section of the main budget to manage expected sales by whatever breakdown suits your business: Type of product, by division, branch or sales channel, or type of customer. In each category budget for margins, discounts and commissions.

Correctly managing your expenses

Key expense items like payroll, overtime, marketing promotions, travel, vehicle expenses and IT costs should be planned for and monitored via the budget but I suggest you don’t clutter the expense budget with too many items which you have little power to manage.

Rather lump these together, you can always drill down if the costs get out of hand. If you have a seasonal business with variations in sales and expenses depending on the time of the year, make individual budgets per month.

Do not forget balance sheet lines, especially capital expenses for new buildings, machinery or vehicles, and also borrowings and other liabilities.

Debtors, creditors and inventory should all be planned and monitored and it is a good idea to monitor measures like average days outstanding for debtors and creditors, days inventory held, bad debts and obsolete or lost stock.

The last items can be target ratios which may not form part of the budget, but should be reported on regularly so that you do not get nasty surprises at the year end. Prepare the budget with everyone concerned to get buy-in. The budget becomes an agreed plan of operations to which everyone is committed.

Continuously review your budget

Monitoring performance against budget should be done at least quarterly, but I prefer once per month in a management meeting. If you are the only manager, set aside time each month for a vital review your performance against budget.

The actual results must be up to date and available. Use a simple spreadsheet showing budget, actual and variance or a dashboard which shows key metrics as graphics or tables.

Examine those items where the variance to budget is significant and probe for reasons. The dangerous ones are the start of a trend — for example sales in one area consistently below budget or mushrooming overtime costs.

For any bad variances that are not just a short-term hiccup you should plan to correct the problem, or if the problem is insurmountable, replan to get around it.

Course correct your budget as you grow

The budget can be changed because circumstances are different to those envisaged when the budget was prepared, but a better option is to add another column for a revised budget, so the amount of the change remains obvious.

Managing the budget should not be limited to complaining about excessive entertainment or travel costs, but a vital tool to give stark visibility to key areas of the business that are not performing as expected.

It should involve all the key players in decision-making to catch and fix problems early, but also to seize opportunities presented by better-than-expected performance at the earliest time.

Treat budgeting as a management tool and it is likely to treat you to more profit and less nasty surprises.

Do this

An excellent way to increase profits is to treat budgeting as a management tool. Never be scared of your budget — use it instead.

Article by entrepreneurmag.com

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September 25, 2021 / No Comments /  

4 Ways To Improve Your Budgeting Skills

Article by www.entrepreneurmag.co.za

Traditional budgeting methods have undergone a digital makeover in recent years, and now offer businesses an abundance of streamlined services, tools and access to experts that will help improve your budgeting skills. From regulating current expenses to applying for funding, a well-crafted budget is an essential part of developing a healthy financial forecast for any business.

1. Take advantage of budgeting software

Creating an effective business budget will require a bit more than just utilizing a personal financing software. Luckily, there are plenty of tools available that focus on helping you get your professional finances in order. Centage, which came out in 2001, is a powerful portal that gives companies the chance to streamline their budgeting, while also providing forecasting and consolidation features to help you create more strategic budgeting plans. Investing in a budgeting software is a great way to stay organized at any stage of your professional development.

2. You can’t predict the future, but you can prepare for it

In addition to making the most of the available budgeting tools on the market today, it also pays to do your research. Understanding market fluctuations, as well as competitor activity, will help you create a clear budget plan based on these variables. Keeping up to date on the changes that tend to happen frequently within your industry will also grant your business a bit of extra confidence when it comes to making future decisions. Budgets can provide a strong financial forecast help businesses adapt quickly to changes that might have set them back in the past. For example, if your product is largely dependent on seasonal trends, these projections will give you a greater sense of which months you will be seeing more revenue, allowing you to allocate these funds accordingly throughout the year.

3. Ask an expert

Creating an effective budget for your business goes way beyond simply organizing your finances. Reaching out to an expert to help you construct a budget that fits both your personal and industry needs can better schematize your current plan, and potentially make your business model more profitable.

The rapid growth of the freelance economy has resulted in the creation of platforms that give businesses, big and small, access to a wealth of skilled finance professionals. Whether you’re in the market for a quick consulting session, or on the lookout for a long-term advisor, speaking with someone who specializes in creating budgets for business is a great way to gain valuable insight on the best ways to handle your finances. 

4. Don’t forget about funding

Access to funding is an important resource for any business, especially those that are in the early growth stages. Whether you are starting out small with a modest self-investment, asking friends and family for a bit of help, or preparing to pitch a big name investor, having a financial forecast in place is a must.

For those that are hoping to get their hands on VC funding, presenting current activity and future financial projections is an essential part of the process. Of course, investors understand that budgets are subject to change, but without a financial plan in place, investors may question whether or not your business is a worthwhile investment. A clearly constructed budget can help illustrate the value of your company, in addition to showing what will be done with supplementary funding to increase growth.

For small and big businesses alike, an agile and well-crafted budget is key when it comes to maintaining and improving your company finances. From managing the day to day expenses to preparing for unexpected changes in the market, getting into the habit of good budgeting is the best way to ensure steady growth for your company.

Article by www.entrepreneurmag.co.za

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September 17, 2021 / No Comments /  

5 Top Business Tips for SMMEs

Article by www.iol.co.za

In a country like South Africa, where job creation is critical, there is a great deal of emphasis being placed on the development of small medium and micro enterprises (SMMEs).

Small businesses, in particular, provide opportunities where smart entrepreneurs can thrive, especially if they pay attention to the advice of experts who have already been down that road. David Seinker, chief executive of office and co-working space, The Business Exchange (TBE) in Johannesburg, has the following top tips for entrepreneurs about to embark on their own journey.

1. Offer a product that offers a solution

Many budding businesses believe in their idea or the products they envisage selling, but the key to success is in knowing, first and foremost, how that idea or product will offer a solution. “Before you even begin to do anything else to set up your business, you need to thoroughly investigate the market you plan to service,” says Seinker. “A product or service must fill a market need. It must go beyond just something that’s a nice idea. Know what problems your offering can solve, or what hole in the market it will fill. At TBE, for example, we recognised the need for serious entrepreneurs and business people to have a space that meets their requirements. They didn’t want a space that offers free drinks and foosball. Instead, they need a space that is as focused about business as they are”.

2. Understand the start-up costs and keep track of your cash flow

Once you know what you want to offer, the next step is to work out how much it is going to cost to set up the business. Apart from costs in terms of finding and kitting out premises and paying monthly rent, you also need to factor in everything from office supplies to staff members and the costs they will incur. This also includes your own personal expenses and how much money will be required to meet your own commitments. “From there,” notes Seinker, “it’s also crucial to keep a careful track of all cash flow. Most often, businesses fail not because of a bad idea, but because they simply didn’t manage their cash flow.”

3. Choose your working space wisely

A work environment conducive to doing business is critical for a new company, and many entrepreneurs start theirs working from home, but this may not necessarily be the best option for clients to take the business seriously. However, neither is splashing out from the start on expensive offices and incurring the many costs that such a set-up can entail. “Enter the rise of the co-working space,” notes Seinker. “This is an environment where new businesses can rent anything from a desk to an entire office, but where they literally just enter, plug and play. Co-working spaces such as The Business Exchange take the hassle and expense away from infrastructure costs such as capital equipment in terms of everything from office furniture to copiers, the provision of reception and maintenance staff, or the costs associated with technological requirements such as the setting up of  Wi-Fi or video conferencing facilities.”

Co-working options also offer new businesses enormous flexibility to enable them to grow when more space is required, or scale down if they need to tighten their belts. “Plus,” says Seinker “there are no obligations to sign leases and no FICA requirements to fulfil. But at the same time – because first impressions really do count – co-working spaces – especially those in prime business locations – provide a professional environment that says your new business really does mean business.”

4. Sort out your tax obligations and insurance from the start

Consult with experts beforehand to find out what tax obligations your new business is required to meet, as well as which insurance policies you may need. From a tax perspective, make provision to pay for the services of a qualified bookkeeper (even if it’s only a part-time agreement or one based on a few hours’ work per month to keep financial records in order), or an accountant who will look after your annual tax submissions. On the insurance front, make provision to protect yourself in terms of medical issues or loss of income, risks to your business such as theft or damage to your stock or items such as computers and cellphones, and even public liability insurance that protects you against claims made by members of the public resulting from accidents or damage to property. “Many new business owners make the mistake of thinking that their home insurance covers their business as well,” notes Seinker, “and this usually is not the case.”

5. Connect

Connectivity is about everything from investing in a digital online presence for your business from day one (whether it’s a website or even just a presence on Facebook, Twitter or Instagram) to networking with like-minded or reciprocal business people. This is another area in which a co-working environment can assist, notes Seinker: “A co-working space worth its salt will offer excellent online connectivity from the moment you walk in the door, solving what could be a huge headache for many new businesses. Plus they are renowned for bringing people in similar or complementary industries together to exchange ideas as well as business opportunities. But outside of the work environment, it’s also about attending as many networking events as you possibly can and getting your name and that of your business ‘out there’ as quickly as possible. At TBE, we hold regular networking sessions for our members. This not only means that they are meeting the people who work next to them, but it also provides an opportunity to possibly meet someone who would be able to help with a particular service down the line.”

Article by www.iol.co.za

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June 28, 2021 / No Comments /  

6 Tips for Managing Small Business Finances

Article by www.succeedasyourownboss.com

Every company, big or small, is always concerned about one thing – managing money. Proper financial management is crucial to surviving a volatile economy and the industry competition. Small businesses, especially, need to exercise caution with their financial decisions from the very beginning. It takes more than just a good idea to run a business. Every business needs a financial structure that generates a profit to stay credible.  Entrepreneurs need is to be equipped with good money management abilities to turn their venture into a success story.

Not all business owners, however, are adept at handling finances. But that doesn’t mean all hope is lost.

Here are 6 tips for managing small business finances.

  1. Educate Yourself

One of the first things that you should do is educate yourself about the various aspects of finance. For starters, learn how to read financial statements (if you don’t already know how). This is one important statement that tells you all about your money – where it originated from, how many hands it changed, and where it is.

Financial statements contain 4 essential details – cash flow statement, income statement, balance sheet, and statement of shareholders’ equity. The cash flow statement analyzes operating activities, investments, and financial in/outflow. The balance sheet provides information related to the company’s assets, liabilities and shareholder’s equity. The income statement reflects the revenue earned within a specific period of time. Shareholder’s equity represents the amount by which the company is financed through common and preferred shares.

  1. Separate Personal and Business Finances

Always keep your personal and business finances separate. This entails getting a business credit card and putting all related expenses on it. This should help you track your outlays and keep you in control.

You will also do well in opening a savings account dedicated to your business, wherein you can transfer a certain amount of money from each payment that you receive and gradually build a considerable corpus. You can use this money to pay taxes.

  1. Cut Costs

It is important that entrepreneurs stay tight-fisted to keep their expenses in check without hampering customer satisfaction. This, especially, holds true for small businesses.

Every business endures 2 types of costs – fixed and variable. While fixed costs have to be borne irrespective of whether your business is making money or not, there is scope for savings in variable costs.

For example, instead of buying costly branded software, you could work with free, cloud-based, open-source software, which is equally good. Conduct free online calls, video conferences instead of travelling lost distances. You could also try bartering your services with other professionals and cut costs.

  1. Invest in Cloud-based Accounting Software

While you can definitely download regular accounting software to manage your finances, it will never give you the kind of convenience cloud-based accounting software can.

Web-based software provides you with real-time insights as most allow you to store, update, track, and access data from anywhere at any time. Whether you’re at home, office or are travelling, you can conveniently work with your data from anywhere you like. It is error-free, hassle-free and dependable.

  1. Monitor and Measure Performance

It is crucial that you, as a business owner, keep tabs on the movement of your money, especially when large amounts are involved. Keep looking at your company’s financial performance in comparison to the past financial statements to project your future revenue, expenses and cash flow.

Being aware of these aspects will help you make informed decisions for your business.

  1. Hire Professional Help

Everyone needs help, especially a budding entrepreneur interested in making a huge success of his venture. Sometimes, it pays off to engage the services of an expert, even if it is on a part-time basis. They can help you determine where your business is, where it is heading by using and analyzing your data. Make sure you hire someone you trust, though.

Whether it is tax planning for the next financial year, or payment for the current year, their expertise can go a long way in guiding you and bringing you peace of mind.

Conclusion

While owning and running your own business can be exciting, it can also be nerve-wracking, especially when it comes to handling finances in a lucrative manner. Don’t let your business suffer due to poor money management. Keep the above tips in mind and give your venture a bright future.

Article by www.succeedasyourownboss.com

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