Author: Megan Davies

How to build a business you can sell!

Many entrepreneurs start their business with the goal of earning an income for themselves, but they often think of the business only in terms of them running it.

In truth, there is a huge benefit to starting a business either with the goal of selling it or at least setting it up so it can be sold at some point in the future. You don’t have to plan on making a fortune off the sale, but the efforts that go into creating a sellable company will also increase the chances your company thrives while you’re in charge.

Here are some things you can do to increase the chances your business can successfully be sold!

1. Put effort into it

Whether you plan on staying in your business for a long time or are looking to sell as soon as possible, you need to run your company as though you’ll be around for a long time. 

A sellable business is one that is thriving, which takes time and energy. Don’t start up a business to sell if you think you can give it a fraction of your attention before you walk away. That could lead to a scenario in which no one wants to buy your company.

Invest effort in your company and you’re more likely to be rewarded with a business that people want to buy, and pay top dollar for.

2. Keep your arrangements simple

Complicated financial arrangements make selling a business more difficult. If there are too many investors who have different ideas about how the business should be managed, or when it can be sold, you may find yourself unable to sell even if you truly want to.

If you are involved in partnerships, make sure you are all on the same page about the circumstances that will lead to a sale. Ensure that your financial ties and arrangements are transparent, so buyers aren’t surprised when they complete their due diligence.

3. Develop standard operating procedures

You may like to take care of everything yourself, but that’s not practical if you want a business that thrives (and one that can be sold). 

To sell your business, you need procedures that can be done by anyone, regardless of whether you’re in the picture or not.

Developing and writing out standard operating procedures helps your current team run the business in your absence and makes your business more attractive to potential buyers.

4. Consider the conditions that would make you want to sell

Even if you don’t intend to sell your business, life can get in the way. 

A variety of circumstances can make it so you need or want to sell your company. Rather than making an emotional decision in the heat of the moment (which could result in you getting far less than you should) think about the circumstances and conditions that could lead to you selling your business.

What life circumstances would cause you to sell? Divorce? Illness? Retirement? What about the financial circumstances? Is there a minimum amount you want to get out of your business if you do sell? Would you sell right away if someone walked through the door and offered you X amount of dollars? Would you sell if the business were no longer making you happy? If so, what does that look like for you? What are the indicators you’re no longer satisfied with owning your company?

Keeping these circumstances in mind makes it less likely you’ll make an emotional decision and more likely you’ll make a rational one.

Final thoughts

Regardless of whether or not you plan to sell your business, running your company as though you will one day helps create a successful, thriving organisation that is much easier to find buyers for.

That’s important because you never know what the future will bring.

If you are looking for Fulham accountants or a tax advisor in London, get in touch!

e: office@londonaccountants.co   t: 0203 137 9791

Kind Regards,
The Team at London Accountants

5 steps to early retirement!

For some people, early retirement is a choice. For others, it’s a necessity. 

Regardless of which group you fall into, there are some steps you can take to help make early retirement a reality and live the life you dream about.

1. Know your goals

Before you know exactly how much money you need to save, you need to know your goals for retirement. Do you want to live in a small home in a small town? A luxury apartment in the city? Travel around as much as possible (when it’s possible)? What sort of lifestyle do you see yourself living after you retire? Do you want to retire entirely or are you planning on leaving a corporate job to follow your creative dreams? Will you still earn a bit of an income, but on a very part-time scale?

The answers to those questions can help you determine how much money you need to save now (and how aggressively you need to save!) to set you up for early retirement. Establish what you want your daily retirement life to look like so you can better plan for it.

2. Have a retirement budget

The information that you came up with about the type of lifestyle you want to live will help you create a workable retirement budget. How much of your budget do you want to spend on food shopping and utilities? How much do you need to save for home repairs or renovations? Will you want to downsize your living space?

Anticipate any healthcare costs that could come up. You can’t plan for everything, but remember that healthcare / care costs tend to increase as you age. Be prepared financially for those charges.

3. Pay off your mortgage

Sounds easy…but the fewer expenses you have in retirement, the better for your cash flow. Not having a monthly mortgage drastically reduces your expenses when you’re no longer earning a steady income. As a bonus, when you pay off your mortgage early (without fees for paying it off too quickly) you’ll likely pay less in interest. So you’ll be saving yourself even more money.

Knowing that your home is paid off entirely gives you a great deal of financial freedom and security in your retirement years.

4. Have a financial plan

You need a financial plan that sets out your goals, expenses, income and debts so you know where your finances sit. Any major purchases should be checked against this plan, keeping you on track as you move toward your goals.

Review and revise your plan as necessary. If you’ve been set back by any major expenses, see if there are ways you can limit your spending in other areas. Or see if there are ways you can earn additional income while you’re still working.

Remember that if you’re saving for long-term wealth, you’ll need to live below your means. Reduce your expenses where possible and increase your income.

5. Generate passive income

Cutting expenses can help you save some money, but diversifying your income streams to include passive income, such as property or a side-hustle, can be more lucrative. Your passive income can be developed to cover your monthly expenses, which enables you to become financially independent much more quickly.

Final thoughts

Regardless of why you’re looking to retire early, having a solid plan in place and following the above steps can help you reach the financial independence you need to feel comfortable leaving your job.

It’s important to live in the present even while you’re looking to the future. You’ll have to sacrifice some things to stay on track financially, but don’t give up everything. Treat yourself sometimes and celebrate when you reach your goals.

If you are looking for Fulham accountants or a tax advisor in London, get in touch!

e: office@londonaccountants.co   t: 0203 137 9791

Kind Regards,
The Team at London Accountants

Conference Tips for Small Business Owners

For small business owners, business conferences can be both a blessing and a curse. They give you the opportunity to develop new skills and learn strategies that you can use in your business, and they also provide you with the chance to meet new people and expand your business network. Unfortunately, they also pull you away from your business and they cost money, so it’s important that you get the most out of any business conference you attend.

Here are some tips to help you come away from your next conference feeling motivated and energised, rather than overwhelmed and exhausted.

Plan Your Sessions:

Almost all conferences announce their activities—including keynote speakers, workshops, daily sessions, and networking events—ahead of time. Not every keynote speaker and workshop will be relevant to you and your business, so to save yourself from wasting time in a session you don’t care about, make a note of the sessions and events that most interest you. If an event requires registration, make sure you register ahead of time so you’re not disappointed when you get to the venue.

Be Prepared:

With so many people at one event, you’re sure to run into someone who can offer you a business opportunity. It could be a potential client, a mentor, or someone who provides services you might need. Take enough business cards and promotional materials (brochures, leaflets or whatever your business uses) with you so the people you meet can contact you after the conference is over.

Take Time for You:

It can be easy at a conference to spend your days in sessions, your evenings networking, and your free moments checking emails and dealing with work issues. That will leave you overwhelmed, frustrated and tired, and you won’t get as much out of the conference. Make sure you get a full night’s sleep, so you’re rested and alert for the next day’s events. If you have a few quiet moments, take those for yourself so you have a second to breathe.

Even better, plan breaks into your day. Just because you’re at a conference doesn’t mean you have to attend every event. Trying to take everything in to get the most out of the conference can backfire because you’ll be so tired you won’t get anything out of the later sessions. Don’t be afraid to be selective about the events you attend.

Pick an Action Step After the Conference:

It’s tempting to go to a conference and come away with a ton of information and skills that you want to use right away. 

You feel energised from changes at once and giving up when making the changes becomes too difficult. Instead, pick one or two things that were the most relevant to your business and that you feel you can implement without too many obstacles.

Final Thoughts

Small business conferences are a fantastic way to develop skills, learn new strategies, and grow your business. By following a few easy tips, you can make your next conference an energising learning experience, rather than an exhausting ordeal.

If you are looking for Fulham accountants or a tax advisor in London, get in touch!

e: office@londonaccountants.co   t: 0203 137 9791

Kind Regards,
The Team at London Accountants

4 Key Areas to Evaluate in your Business Budget

With the potential for business life to return to something resembling normal, it’s a good idea to take a look at your budget and see where you may need to shift some of your priorities. Pay attention to how your spending over the past few years affected your business and either helped you achieve, or took you away from, your overall goals.

Considering how your business and your employees functioned in recent years can help you predict upcoming trends–which will enable you to plan for adjustments.

Here are some key areas to evaluate in your budget, so you can determine whether you need to spend more in these areas.

1. Technology

This is possibly the business area with the most room for growth–and the most evidence that adoption is needed. Technology has made it possible for employees to work remotely, for you to provide goods and services virtually, and for you to stay connected with your team while working from home.

If your business is enabling remote work, you’ll need to make sure you’ve got the proper systems and equipment in place, such as document storage, redundancies, cybersecurity and anything else the law might require of you.

Make sure everyone on your team has access to the equipment they’ll need, and knows how to use it.

2. Human resources

With virtual work comes access to employees from across the globe. Geography is no longer a barrier when it comes to hiring skilled employees, at least not in companies that use remote work.

Having teams from across your country and around the globe is an incredible opportunity. Make sure you’ve invested resources in understanding the various rules and regulations that they’re governed by. They likely have different laws regarding payroll requirements and benefits plans. There may even be rules about how you can hire and fire employees.

Make sure you understand whose employment laws govern the work they’re doing for you, and then be certain you take the necessary steps to follow those laws.

3. Automated systems

There are many activities involved in running your own business. Some need your time and attention. Others can be shifted to automated systems, freeing you up for more vital tasks.

Take a look at the activities you regularly carry out. Even those that only take a few minutes a day add up over the course of a year, and chances are they can be automated.

Online invoicing systems make it easy to send invoices and follow up with people who haven’t paid you, all with the click of a button. Customer Relationship Management software (CRM) enables you to track leads as they move through your sales funnel and become your customers. Project management software lets you manage your projects from your smartphone, no matter where the jobsite is.

Most of these automated systems also produce comprehensive reports so you can gain valuable insights into your business processes.

4. Consultants

You don’t have to be an expert in every aspect of your business. If there are areas you aren’t certain of, or want to learn more about, you can hire outside parties to guide your decision-making. Consultants can help you with managing your business, evolving your career, building your relationships, and even marketing your goods and services.

Consultants provide an external and unbiased perspective on your business. Because they’re experts in their field, they have insights into what other companies are doing–and what has and hasn’t worked. They can also help you anticipate and plan for upcoming challenges.

Final thoughts

Examine these four key areas in your business to determine whether it’s worth spending more on them in 2022, as you grow your business.

If you are looking for Fulham accountants or a tax advisor in London, get in touch!

e: office@londonaccountants.co   t: 0203 137 9791

Kind Regards,
The Team at London Accountants

Signs you’re undercharging for your work! 

When it comes to the overall success of your business, one of the most important decisions you’ll face is how to price for the work you do. Charge too much and you could scare away potential customers. Charge too little and you could run yourself out of business.

Figuring out how much to charge is stressful, but it’s worth it. If your business doesn’t bring in enough money to pay all the bills and compensate you, it isn’t going to last long.

So, how can you tell if you’re asking too little for your services? Here are some signs you need to consider charging more, and soon.

1. The work isn’t worth the money

Many small business owners have periods where they don’t feel motivated to work. That’s normal. 

But what’s not normal is repeatedly taking on projects (or clients) that you don’t feel are worth the money they bring in. You may feel obligated to do the work, but there might also be a sense of resentment about it. Working may feel like a chore.

If the work doesn’t feel as though it’s worth the money you’re making, that’s a sign you need to charge more. You don’t always have to feel keen to work, but you should feel as though you’re being fairly compensated for what you do.

Which brings us to the second sign…

2. You’re not taking home a salary

Small business owners have a tendency to make sure everyone else is taken care of first. There are bills to pay, marketing to take care of and, sometimes, employees who need to earn a living. You can’t forget about yourself, however.

If your business doesn’t bring in enough to make sure you bring home a reasonable salary then you aren’t charging enough for your services. You own a small business so you can be in control of the work you do; you should also be in control of your salary. If you don’t make a salary, you need to charge more and you need to do so quickly.

3. Your prices haven’t changed in years

If you can’t remember the last time you raised your prices—or you can but it was a long time ago, then you need to increase your rates. The cost of living is constantly on the rise and so is the cost of doing business. 

If your cost of doing business increases but your prices don’t, you’re earning far less from your small business than you used to, or than you should. Don’t go longer than two years without reviewing and increasing your prices. 

Ideally, you should review your prices annually.

Final thoughts

It can be daunting to think about raising your prices, but it’s important to do. You work hard as a small business owner and you deserve compensation for the time you put into your business. You also need to charge enough to ensure all your business expenses are paid for and that you can withstand a cost of doing business increase.

If changing your prices for current customers seems overwhelming, start small. Set higher prices for your services and charge new customers those rates. If you’re concerned about losing existing clients by raising prices too high too quickly, increase their rates incrementally. You can also give your clients plenty of notice about the increased rates, so they have time to become used to the idea.

The really good customers and clients will understand that you need to raise the rates and will support you for doing so. Those who don’t probably weren’t great clients to begin with.

If you are looking for Fulham accountants or a tax advisor in London, get in touch!

e: office@londonaccountants.co   t: 0203 137 9791

Kind Regards,
The Team at London Accountants

3 finance options for your business.

Most entrepreneurs find a time in their business when they need to access financing. 

It may be in the early stages of their business, when start-up costs for offices, equipment and employees must be covered. Or it may be later on, when they have to relocate, purchase more inventory or equipment, or market their business more aggressively.

Financing a business can be scary, but there are many options for entrepreneurs to consider. They each have different advantages and disadvantages, but chances are there’s a financing option that will work well.

Here are three options for financing your small business.

1. Small business loans

Business owners typically only think of small business loans that are offered by banks, and financial institutions do offer such loans. Banks may be more conservative with their small business loan offers, however. It can be difficult to secure a bank loan if you have no credit history or collateral to back the loan.

There are other ways to obtain small business loans. Many governments offer small business financing programs, which can be used for a variety of entrepreneurial expenses. Look into your government’s financing programs to determine if you can obtain money for the expenses you face. Look closely though, not all expenses are necessarily included.

Less traditional small business loan providers can also be found. Thanks to the Internet, there are even ways to obtain small business loans online, through lending companies. It may be easier to obtain a small business loan through such companies, but they may come with an important disadvantage: high interest rates.

Before you agree to any loan, no matter who offers it, make sure you understand all the terms and conditions.

2. Angel investors

Angel investors are people who invest their own money into start-up businesses with the expectation that they receive a return if the business succeeds. They are often already successful at investing and could inject experience and wisdom into your business. They also won’t require a loan payment, which can affect your cash flow.

They may take part ownership of your company and tend to invest in businesses where they can receive a high return. 

This means that you should be thinking about your business becoming massive venture in the future, not staying small. You should also be okay with accepting input about your business from someone else.

3. Bootstrapping

If you have the money saved or the motivation to work extra hard to make the money you need, and the above options don’t appeal to you, you can always finance your business yourself. The advantage is that you won’t be paying interest rates, you won’t lose ownership of your business and you won’t owe any money. You also won’t feel that you have to give anyone else a say in how you run your company.

The disadvantage is that you may not be able to grow as quickly as you want, you’ll be dipping into your savings, and you may wind up working very long hours to make up the money.

Final thoughts

Most small business require an influx of cash in the early stages so the owner can cover the start up costs and pay bills until regular revenue rolls in. The type of funding you access can depend heavily on your financial situation, your business goals, and your willingness to give up a portion of your company’s ownership.

If you are looking for Fulham accountants or a tax advisor in London, get in touch!

e: office@londonaccountants.co   t: 0203 137 9791

Kind Regards,
The Team at London Accountants

Cash Flow Advice for Small Businesses!

Solid cash flow management is vital to ensuring your business survives, but not everyone understands what cash flow is or how to manage it. That’s likely what makes it a leading cause of stress for small business owners. 

In fact, a Capital One study found that 42% of small business owners say cash flow management is a major concern for them.

Cash flow refers to the movement of money into and out of your business. It’s based on the amount of money you bring in minus the amount you spend. A positive cash flow means you’re bringing in more than you’re spending. A negative cash flow means you aren’t bringing in enough to cover your expenses. Your company can run into problems by not charging enough for goods or services, having clients who are chronically late to pay, growing too quickly or simply spending too much money.

Cash flow can vary throughout the year, depending on sales cycles or whether you’ve made a large purchase. 

Here are three strategies you can use to gain control over your cash flow.

1. Understand your profitability:

Managing your cash flow is great, but it won’t help you if your business isn’t profitable. Take a look at each of your products and services to determine how much they bring into your business compared with how much you spend to provide them. Find any inefficiencies in your processes and eliminate them if possible. Figure out where your business is most profitable and where you’re dealing with cost overruns.

The basis of a solid cash flow is ensuring you offer goods and services that are profitable and help you obtain your goals, while reducing those that negatively affect your finances. You may need to increase your prices to reflect the cost of goods sold, or stop selling lower-margin products or services.

Similarly, take a look at your clients. Are there some that you are undercharging or spending too much time and energy on? Can you increase their fees or find higher-paying clients?

2. Write a cash flow forecast:

Your cash flow forecast (also called a cash flow projection) predicts how your business will perform financially over a set period. It’s a good idea to have a cash flow forecast for a year, broken down into quarters and months.

The projection takes into account your revenue and expenses over those set periods, and helps you figure out how much you need to make in that period to cover your expenses. It can also allow you to anticipate any upcoming cash flow issues, such as slower periods that may require you to cut back on expenses. If you have any anticipated big-ticket items you’ll need to buy or plans to expand your business, include those in your forecast.

Periodically check your actual cash position against your projection to see how you’re doing and if you need to make any adjustments.

3. Use technology to keep on track:

There are plenty of software solutions that can help you gain insight into your company’s cash flow. They can help you build projections and get a real-time view of how your business is doing. This information can then be shared among company managers, so everyone has an idea of how the company is doing financially and where strategies need to be put in place or altered to get you back on track.

Additionally, invoicing software and project management software can be used to encourage faster, easier payment from clients and keep projects on budget. This will also improve your cash flow.

Final thoughts

Many business owners find cash flow management stressful, but with a little information, and planning, and by using the right tools, you can have better insights into your company’s financial situation. Those insights will help you make better decisions for your business and gain control over your cash flow.

Got a question about your business? If you are looking for Fulham accountants or a tax advisor in London, get in touch!

e: office@londonaccountants.co   t: 0203 137 9791

 Kind Regards,
The Team at London Accountants