Research shows that each year around a third of us in the UK will set New Year’s resolutions. The most common resolutions are things like joining the gym, losing weight, quit smoking, drink less alcohol and so on.
However, if you run your own business you may have set some New Year’s resolutions to help improve your business for the New Year? We have listed three new years resolutions for small business owners that we would recommend.
- Keep Costs Down
Minimising your costs is essential if you want maximise your profits. Money can be wasted in all areas of the business very easily. Cost inefficiencies can build up to large amounts over time if you don’t keep a close eye on what you are spending. If your business slows down between Christmas and the New Year, take advantage of this. Use this time to review your in-comings and outgoings. You may choose to speak to suppliers about discount for customer loyalty for example. You could also introduce staff incentives for finding ways that money can be saved in the business.
It’s a good idea to do quarterly reviews on your spending to quickly spot where money is being spent and if money can be saved.
- Credit Control Tightening
If you have non-paying and late-paying customers that it is likely you are giving yourself a major cash flow headache. Do you currently carry out credit checks on all new customers? If not then this should be a new year’s resolution for your business. Make sure that your customers receive invoice as soon as possible. Any delays will affect your cash flow, so the sooner the invoice is received by your client; the sooner payment can be made.
We would recommend that you have a credit control system in place that tells you when a payment is overdue so you can chase that late payment before any more work is done.
- Cash Flow Forecasts
Every year over 32,000 businesses fail in the UK; this is usually because they run out of cash. As a business owner you need to address cash flow issues. You need to keep your financial records up to date so you know how much money your business has available at all times. Creating reliable cash flow forecasts is essential to a successful business.
If you notice that you have a short-term cash flow problem before it is too late then you may be able to cut costs or arrange finance to get you by. Just ignoring your cash flow and hoping for the best is not an option.
These are just three new years resolutions for small business owners that we would recommend. If you would like the help of a local small business accountant in Peterborough to help your business New Year’s resolutions then contact us directly. We would be happy to discuss how we can help you.