The inspiration for this blog post came whilst building a snowman on our front lawn with my little one. Up here in Denholme it’s known to be “two coats colder” so we get the opportunity at least once a year to hone our Snowman building skills.
We tried a couple of methods but ultimately a solid foundation of compact snow was the winner….it’s the same in business.
You must start with a solid foundation or risk a collapse at the first sight of adverse conditions (or a car tyre hurtling towards you at speed…but that’s definitely a story for another day 😊)
So what do I mean by that? You need a really good idea of what you want to achieve. Is this a side hustle or is it going to become your life for a number of years until you retire or potentially sell your business?
In both cases you’ll need to register as self employed, limited or partnership with HMRC. The time to do this is either before you start your business or within a few weeks of starting. Not in December when your first (self employed) tax year is closing or even almost a year since you set up.
How do you know that your business is turning a profit? Spreadsheets (I mean, I’m an Accountant, I love a good spreadsheet…..) are all well and good, but you do need to set some time aside to actually input all your receipts and sales into said spreadsheet.
Then there’s the problem with making sure you keep all your receipts so you can backup your expenses. I bet some of you, like me, forget to check your pockets before your pants go in the wash…. Bye bye receipt, nice knowing you 😅
“So how can I do that?” I hear you yelling at your phone screen? Software is key. In 2024 HMRC are bringing in MTD ITSA…. because they love a confusing acronym or two (Do not get me started 😂😂😂). It actually stands for “Making Tax Digital for Income Tax Self Assessment”
If you earn more than £10k in TURNOVER (ie Money In) you will be required to use software to submit your returns. I bet you’ve noticed all the Quickbooks, Xero and Sage adverts on TV, Radio and Social. I see or hear them every single day… But maybe I’m wired that way, like when you see your first Tesla driving down the road then all you can see is Teslas 😂.
Now the software mentioned above can be used by anyone, but my experience is that unless you have some basic accounting knowledge, you will mess it up. I’m not saying that because I want to sell you bookkeeping services, honestly. It’s just my experience so far. The software people make it sound easy and they are user friendly but do you know how to categorise your costs or post your assets so your Accountant can easily process your return at year end? Then there’s payroll which is a very emotive subject for most. You don’t want to muck it up.
Plus most Accountants charge a larger fee for tidying up work because they have you over a barrel. Not me by the way, I do charge a catch up/set up, but it’s not going to give you a heart attack… You’ve got enough surprises on this roller-coaster we call life.
So my advice is speak to an Accountant..
Your chosen provider can be anywhere in the world now that cloud accounting and meeting software is widely used. However, some people find some comfort in knowing their accountant is close by. So start by doing a search for “Accountant near me”, “Accountant Bradford”, “Accountant Haworth” (you get the gist) and have a look at their Google My Business page, reviews, social media, website. Really get a feel for them and whether you think you’ll get on. This person will be part of your business, providing key information in a timely manner, so you need to at least like the person!
Speak to them about your particular circumstances and they’ll recommend a course of action, their preferred software provider and of course a fee proposal.
Set up and tidy up can take 6-8 weeks at least, but from then on in you’ll have regular information you can act upon. For instance how are your Sales comparing to prior months? Are your costs spiralling?
When you have this, you can then forecast your future earnings using actual data rather than a daydream.
Other things to consider are:-
What’s your message? Your personality? Who do you want to attract.
Google My Business
Social pages that are active (you can automate posts to save time)
Card payment options
Other automation (such as Zapier)
There’s a lot to consider but there is also a lot of help out there for start up businesses, particularly in the business to business sector. I personally have had some great experiences with Leeds Ad:Venture for free training, mentoring and grants. If you are not in Leeds then there will be one in your local town and its usually related to the local Council.
Also, I’m always here for a chat if you need. Having business buddies and networks are going to be a great asset. So make sure, even if you are introverted like me, you push yourself to try!
Good luck with bossing your year! Let me know how it goes!