With the end of the last financial year behind us and a new year stretching ahead, now is the time to get planning and make sure that this year is the best year ever.
Get a plan
One of the best ways to make sure you’re on the ball for the end of the financial year is to start early. Having a list of things you do regularly in your week can help you keep on top of the admin tasks that take less than an hour if you do them regularly and cause a whole lot of pain if you save them up to the end of the year
There are plenty of ways to get funding for your business – there are many government and private schemes that offer grants and loans for your business to help get you up and running.
Alternatively, why not consider peer to peer lending (also known as p2p lending or social lending), where other people can provide a loan for you with a small interest rate (usually ranging from 6-12%) without having to deal with banks etc in the process. Banks are becoming less likely to lend to small business startups due to the potential risks involved, or there are restrictions in place for banks supplying funds to certain industries or business types.
Simply post your business idea online on a peer to peer lending website and lenders can then decide what to invest in and how much. There are a number of reputable peer to peer lending companies in the UK, from regional p2p lending companies such as Folk2Folk in Devon and Cornwall to national lenders such as Zopa. If you’ve been turned down for funding from a bank or government scheme, give peer to peer lending a try which many UK businesses, especially start-ups are doing as this article on Startup Donut talks more about.
Get a checklist to get your house in order
Make a checklist of things that you do once a week to stay ahead of your admin. Whatever else you put on your list, you should make sure that it includes sending invoices, paying bills, categorising your receipts for expenses and chasing overdue payments. With a little effort each week, your cash-flow will improve and you’ll have a clear and easily accessible set of records with which to complete your tax return at the end of the year.
Regularly prioritise your time
In the hurry to be busy and secure contracts to keep the cash flowing, one thing many freelancers forget to do is check which of their contracts are rewarding and which aren’t. If you have enough money coming in to keep the wolf from the door and you seem to be busy, it doesn’t always necessarily occur to you to check in on how you’re spending your time and what you’re getting for the time you spend.
Keep a timesheet that helps you visualise the time you spend working on each of your contracts and how much you earn from each of them. You may find that your more lucrative clients are the ones who are relatively low maintenance while the ones who take up most of your time pay a pittance for the effort you expend. Just think how much more you could be earning if you sacked one of your high-intensity, low-paying clients and recruit some more clients who pay better for less work.
Get some insight
Once you’re on top of your bills, billing and accounts, you free up some time to look into the financial information that comes from your labours in keeping your data up to date. Make it your job to find one insight from your accounting information every month that can help you do something in your business better.
A good place to start is in your profit and loss statements. This will give you an idea of what your business earned and how much you spent in running costs and other expenses each month. Have a look through and see where the dips or spikes are in the report. Did you have a month where you earned considerably less than the others? Or can you see a time when your income went up appreciably?
Once you lay this information out in a format that allows you to spot trends or outliers in your activity, you can investigate some of the reasons behind it and see about replicating the good stuff and putting in contingencies against those things you don’t want to see happen again.
While it may not be most people’s favourite task and is the one that many people put off until the last minute, keeping on top of your accounts and financial information can be rewarding in a number of ways. Being in a position to close your accounts for the year without fuss is a reward in itself, but it’s also good to be able to get something back to boost your business for the time you put into your financial affairs.