January may be behind us and all those promises we made to ourselves on the first of the month may have been broken, but if the clichés of a sparkling clean, blank slate and newly realised focus on personal development have remained with you, then you could find yourself yearning to make this year count.
The start of any year is historically a popular time to take stock of your achievements over the past twelve months and look forward to the future with a sense of optimism; whether that’s finally living the dream, taking the proverbial plunge and becoming your own boss, or for existing entrepreneurs, investing precious time in planning and development of the next phase of your business journey.
According to government statistics, in 2017 there were 5.7 million businesses in the UK and every year since 2000, the number of SME businesses in the country has increased on average by 3%. There’s no doubt about it, being your own boss is an exciting, if not daunting prospect – whether you’re taking you’re first steps in business or lifting your company to the next level.
If you’re on the cusp of such a life changing decision, it’s important to consider the vital skills and precious resources you may need to succeed. Funding your business aspirations and ensuring you have enough financial resources to launch and run your company should be amongst your top priorities, if you want to grow your idea into a reality.
At Finance For Enterprise we are proud to support both growing and new-start businesses and wherever you are on your business journey, our team of experienced, knowledgeable and supportive Investment Managers are here to help you unlock the potential in your ideas.
With this in mind, here are five top tips to help your business succeed in 2018: whether you are taking those first tentative steps or planning for expansion and future development.
1. Review your business
Remember that document you wrote setting out your hopes, dreams and aspirations? When was the last time you gave it the light of day?
Every entrepreneur who is serious about growing their business into a successful enterprise should begin with a business plan; this doesn’t just mean planning from the outset, but reviewing and updating it regularly too.
A business plan allows you to predict potential peaks and troughs in cash flow, and is arguably one of the most important planning tools at your disposal. Thinking ahead will help you to identify any potential opportunities, plus challenges and barriers which your business may need to overcome.
It should include an overview, goals, audience and market, products and pricing as well as the all-important financial forecasting. However, creating a plan is only part of the process, as it should grow and change along with your business. If your business plan is looking a little lacklustre, perhaps it’s time to review those original plans.
2. Build a good relationship with your accountant
If you’re still in the earlier development stages of your business then it may seem premature to even contemplate hiring an accountant, but choosing a good accountant doesn’t just provide you with a yearly set of figures: they can plan a vital role in managing and growing your business.
If you have a head for figures, managing your finances yourself may be a viable option, but for many entrepreneurs, outsourcing financial duties such as bookkeeping and keeping track of your tax returns can help to reduce time pressures on the business, allowing you to do what you do best and concentrate on growing your business.
If you already hire an accountant, the new tax year is the perfect time to evaluate how well the relationship is working and what value, beyond the books, they bring to the business. If you have worries about the financial state of your enterprise, then it’s best to discuss this with your accountant.
3. Research alternative sources of funding
When you’re starting small, it is often difficult to acquire financial backing from traditional lenders such as banks. There can be many reasons for banks to turn down a lending application and this can apply just as much to established growing businesses as it does to early stage companies. If the banks say no, remember there are other alternatives available, many of whom specialise in supporting early-stage SMEs who have a limited trading history.
Although initially this can be a disheartening obstacle, there are in fact many other ways of acquiring the funding you need for a business. There are a number of regional financiers across the UK who are able to offer full or partial funding on flexible terms.
Do your homework and find out what’s available in your local area. For example, if you are based in the Sheffield City Region, Lincolnshire or East Yorkshire then Finance For Enterprise may be able to provide you with a loan of up to £150,000.
Other types of alternative finance available including crowdfunding and loans from family and friends. Whatever type of funding you require, spend time weighing up your options and choosing a solution that’s right for you and your business.
4. Stay on good terms with lenders
If you cultivate a transparent and respectful relationship with them, this is likely to be beneficial if you need any additional or stop-gap funding further down the line. Should the worst happen and your circumstances change then it’s important to let your lender know as soon as you possibly can. In many cases, they can work with you to help overcome a particular challenge your business is facing.
5. Create (and stick to!) a budget
Taking control of your finances means keeping on top of budgets. Review and track your finances regularly and stick to the budget you have allocated. Whether you are a budding entrepreneur or a seasoned veteran, keep a close eye on your budget: it can be vital to preserving cash flow.
There are a plethora of resources and templates available online to help you make and manage a budget, including professional advice from industry experts and experienced business owners.