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Running a small business, such as a chain of Norfolk holiday cottages, a hotel, a Norfolk B&B, a guesthouse or a retail outlet, involves a good deal of administration, planning, financial management and some legal elements, all of which can become overwhelming as turnover increases. By keeping in mind a few tips and sound pieces of advice such business owners will find it possible to alleviate some of the stresses of running the enterprise and once again be able to enjoy doing what they love best.
Have a good business plan
Having a well thought out business plan is an essential element to have in place at start-up, because it allows an owner to set out the goals of the business and to form a financing strategy. A business plan can be basic or detailed, quite brief or several pages long, but it must always clearly map out the key areas, including break-even analysis, a profit and loss forecast and a cash flow analysis. The cash flow analysis in particular is vital. Even if the business is going very well, there may not be enough cash coming in to keep the company running until customers’ debts become due for payment. Having a business plan will not only keep everything running smoothly, but will also contribute to keeping the business afloat as it grows.
Get help to protect the business
Small business owners are likely to find creditors calling on them personally for the payment of business debts. This is because either a single person or a small group of individuals own most small businesses. This situation can expose their personal finances to County Court Judgements (CCJs) and debt collection agencies. One way that owners can protect themselves from this is by forming an LLC or limited liability company, which shields the owners from such an eventuality. Another useful tip is for a small business to employ the services of an umbrella company. An umbrella company can act as a shield for small companies, providing them with a range of professional services designed to ensure that their owners do not put their personal finances, including the family home, at risk.
Pay debts on time
The prompt payment of invoices, taxes and fees associated with a business is extremely important. Not only does it prevent being overwhelmed by large numbers of invoices coming due for payment at the same time, it also enhances the business’s reputation for paying promptly and in full. This is essential in establishing a good credit rating, which becomes ever more important as the company expands.
Employ the right people
Hiring employees is not just about paper qualifications or a good interview. It is important to look for people that clearly have the motivation and disposition to be successful. Once those people are in place, it is important to always treat them well and to ensure that the working environment is one in which they can complete their tasks and produce consistently positive results.
Keep personal and business accounts completely separate
While a business may initially need an injection of capital from the owner, it is important to establish its own credit history. This cannot be done if personal and business finances are intertwined. From the first day of trading a business should have a separate bank account and credit line. It is also essential to ensure that no personal expenses are paid from business accounts.