Keeping your business out of the red

Top Tips for setting up your own business and more importantly keeping your finances out of the red

Jane Scott Paul, Chief Executive of AAT (Association of Accounting Technicians) provides her overarching thoughts on best ways to prepare your finances when setting up your own business.

1)    Be realistic – times are still tough, consumer spending is still slow. Many businesses that succeed don’t make a profit for the first couple of years; if you are hoping to get “rich” quick then you may need to think again.

2)    Keep a business head on. Think strategically about your product, your market, your cash flow and put a business plan together to ensure business stability, growth and profit. A business can not survive on creative flair alone.

3)    Understand the tax implications on setting up on your own. Tax legislation changes at a never-ending pace and it’s important for new businesses to keep up. Why? Because it can affect your bottom line and you might be missing important tax breaks.

4)    Keep on top of your finances right from the start. Implement a system and make sure it works. The law requires all businesses to have proper accounting records. By doing this you’ll manage your business better and help stimulate business growth. Start-ups that don’t do this, put themselves at a serious disadvantage.

5)    Don’t bury your head in the sand - ask for help, speak to an expert or a tax advisor or better still train yourself up. There are many courses out there which can give you basic finance training, book keeping and business management skills.  These skills and invaluable and you’ll use them from day one.