- run your business for yourself and take responsibility for its success or failure
- have several customers at the same time
- can decide how, where and when you do your work
- can hire other people at your own expense to help you or to do the work for you
- provide the main items of equipment to do your work
- are responsible for finishing any unsatisfactory work in your own time
- charge an agreed fixed price for your work
- sell goods or services to make a profit. You could be classed as a trader if you sell goods or services. If you’re trading, you’re self-employed.
- You’re likely to be trading if you:
- sell regularly to make a profit
- make items to sell for profit
- sell online, at car boot sales or through classified adverts on a regular basis
- earn commission from selling goods for other people
- are paid for a service you provide
You’ll need to:
- keep records of your business’s sales and expenses
- send aSelf Assessment tax return every year
- pay Income Tax on your profits and Class 2 and Class 4 National Insurance- use HMRC’s calculator to help you budget for this
Naming your business: You can trade under your own name, or you can choose another name for your business. You don’t need to register your name. If you need finance to get started: You will need to create a Business Plan, you can do it (Here) for free. It is also advisable to create a Cash Flow Forecast. You will also need to create a list of any assets you may have: You should also say that you intend to carry on working at your current employment until your Business grows, and include details of your employment in your Business Plan and Cash Flow Forecast:
* Double Click the Video Make sure your volume is up.
*Are
You Ready To Start Your Dream Business:
Step
one: Create your Business Plan and Cash Flow Forecast (if you
need to obtain Finance, now is the time to apply for it) (get your
Finance) Now your ready to go.
Managing
your money: 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.
Now here are 5 tips for
managing small business finances.
- 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.
- 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.
- Cut Costs
It is important that
entrepreneurs 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.
4. 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.
5.
Professional Help
Everyone needs help,
especially an entrepreneur hoping to make a success oh a business.
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.