Budgeting tips for home business owners
Here are some of Intuit UK’s top tips for new (or not so new!) home business owners on how to save money and make money:
• Eyes on the prize – The number one reason to start a business is to make money, but despite this, having insufficient cash flow is one of the top reasons why small businesses fail. Therefore, it’s crucial to never lose sight of your finances. Set yourself up for success by doing the maths first, and tracking how much money is coming in and out of your business. When you think about it, there really isn’t much point to putting it all your time and effort, if you’re not going to be profitable.
• Look after the pennies – It’s surprising how quickly even small incidental costs add up, so it will pay you dividends in the long run if you put together a comprehensive budget for your set up and monthly running costs. Make sure you periodically schedule in a review of your expenses, and shop around to ensure you’re getting the best deal. And don’t be afraid to haggle for better terms or rates with your suppliers!
• Get paid – Asking for money can be a bit uncomfortable, but keeping on top of your invoicing is crucial. Remember – no invoice, no payment. The type of invoice you issue does depend on your type of business – for example, this could vary from using duplicate invoice books (if selling to consumers), to issuing computer generated invoices. If you are providing a service, you might only issue an invoice at the end of the job. Something as simple as setting out payment terms and penalties clearly on invoices can also help to ensure that you get paid on time.
• Cheap isn’t always cheerful – Don’t skimp on your business essential items and buy cheap or low quality equipment just for the sake of a bargain. If your business is dependent on a good laptop and broadband, get the best you can afford (you don’t want to replace these six months down the line). On the other hand, nowadays it’s possible to set up and grow a business on a very low budget – make the most of free tools and resources available online.
• VAT, VAT, VAT! – You can claim relief on capital expenditure and business expenses, so remember to keep all invoices for your purchases, and have these made out in the name of the business entity. Where the goods and/or services are for mixed use i.e. both business and personal, you will only be able to claim the portion of VAT that relates to the business use. Further guidance can be found on HMRC’s website
Intuit is a leading provider of business and financial management solutions for small organisations and their advisors including accountants and bookkeepers. Intuit works with British small businesses to understand the challenges that they face and find the solutions they need to be more successful. For more information, please visit: http://quickbooks.intuit.co.uk