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Guest Blog: Small businesses and the numbers

For many having an idea and setting up an business is something that comes naturally, for others it is harder work but something that a significant number of small business owners have in common is a fear of the numbers .. they are scary and if they ignore them it will all be ok .. right? Nope, sorry, it doesn’t work like that!
Understanding the numbers within your business is key to ensuring success. The last thing you want to discover is that you’ve worked hard, had loads of sales but not made any money as you haven’t charged enough.

There are a few key things you ought to be considering:

Costing

Are you looking at how you price your products or services on a regular basis? Often people undervalue what they do, looking at what others charge is good but actually pricing up what your costs are so you can make an informed decision about the price is better.  The number of times I hear “But I won’t sell any if I charge a higher price”.  What’s better – selling 10 at £10 each or 5 at £20 each? Surely the second is as you are getting a better return for your efforts.

Money

Keeping track of the money coming into and out of your business is essential.  I always recommend that businesses operate out of a separate bank account, then you know what cash you do and don’t have and it keeps a clear divide between you and the business.  If you are a limited company then it is a separate legal entity to you as a person so has to have it’s own account.
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Accounting Records

There is absolutely no need to spend a fortune on accounting software, especially when you are a small business.  I’ve just launched a “Small business pack” to help, it contains basic accounting records spreadsheets, a costing model, invoice templates, expenses and mileage logs and for limited companies has dividend vouchers and dividend minute templates and a persons of significant control register template too!

The key is keeping your records up to date and recording everything and doing all this on a timely basis, set aside an hour a week or so to do this as part of your admin, you’ll be glad you did in the end .. honest!

Small Business Pack

Check out Rachaels small business pack containing basic accounting records spreadsheets, a costing model, invoice templates, expenses and mileage logs and for limited companies has dividend vouchers and dividend minute templates and a persons of significant control register template too!

About: Rachael Savage

About: Rachael Savage

Simplified Accounting

Rachael Savage is a chartered accountant with over 15 years’ experience and has been running her own practice looking after small businesses for the last 5 years, she prides herself on having a no jargon and friendly approach and ensures clients understand the numbers behind their businesses whether they are start up or established. When not working, Rachael either can be found pounding the streets in her trainers in preparation for the 10k events she’s entered this year or sat watching her daughter snowboard at one of the UK’s indoor slopes.

For more information head to: http://www.simplified-accounting.co.uk/

 

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