Making Sense of Business

Beware of Partnerships!

2013-07-22T01:38:00.001-07:00

Are you in a business partnership?

It might seem strange to think you need a partnership agreement when you’re in business with an old friend or husband/wife/civil partner/personal partner. But things can go wrong and I’ve seen it happen a lot in the many years I’ve been an accountant (and even before!).

Here are some possible scenarios:

It could be your partner dies and you suddenly find his/her share has been been passed to a relative or personal partner you don’t know/like. What do you do if they try to prevent you making decisions to move the business forward or dislike what you’re doing?
It could be your partner has a long-term illness and can’t work in the business. As a partner they are still entitled to their share of the profit whether they do any work or not. Do you work twice as hard or get help and diminish the profit, including your share?

It could be your partner decides to retire and wants their share out of the business. Do you have to sell all the business assets in order to give them their money? What happens to the business you’ve spent years working on?

It could be your partner and you can’t agree what direction to take the business in. I have seen businesses paralysed for years through indecision and because there was no guidance to resolve disputes.

It could be your partner takes out a loan on behalf of the partnership and then runs off to the Cayman Islands. As you don’t have a partnership agreement the law states ‘you are jointly and severally liable’. Which means, if the lender doesn’t get paid you’re personally liable for the loan.

All of the above scenarios are very real and could easily happen. But if you have a partnership agreement in place then you will have a legal document to help resolve many of these issues.

It’s not a difficult process to put in place. Talk to your solicitor (and make sure they are used to commercial, not domestic, law) and ask them to set up an agreement for you. Then get your accountant to have a look over it in case there’s something missing.

Your accountant should be nagging you to get one in place anyway!

What stops your Business from growing?

2012-10-30T04:08:00.000-07:00

In our recent Business survey nearly 50% of you said you found growing your business a real challenge. But what is it that’s stopping you from growing? Sales or increasing your turnover is a real issue and my last four blogs have covered that issue.

What about cashflow? 26.2% of you mentioned this and 9.8% mentioned it was a struggle getting paid. So let’s assume that cashflow is not just linked to lack of sales but to other issues we all face, like:

Having to wait 30, 60, 90 days or longer before you get paid and sometimes not getting paid at all
Too much money spent on running your business and not knowing how to cut that expenditure
Lack of funding from the bank and not being able to get help when you most need it

What if you could do things differently which means you get paid faster? Would that help your cashflow? I want to share some stories of business owners doing things a different way and getting great results.

If you’re not in the sort of business where you get paid straight away for your product or service you might find you have to wait months before you get paid. Your bloody customers just don’t understand that you’ve had to pay out for materials or rent or wages. Well don’t be too quick to blame your customer. After all who set up the terms and conditions? Who said you had to offer 30, 60, 90 days credit?

You might think it’s the norm within your industry but you know what your customer might not have that same ‘norm’ within their brain. One hynotherapist I know would take bookings for a course of hypnotherapy sessions and her ‘norm’ was 50% upfront, the rest payable in equal instalments at each subsequent session. When she changed one sentence she got a lot more money more quickly. Instead of asking for the 50% deposit, she said ‘how much do you want to pay today?’ Most of her clients paid the full amount!

I would suggest to her going one step further – change the terms and conditions to 100% upfront. She then has the flexibility to offer payment terms, if necessary, while most of her clients paid in advance. Do you set up conditions that mean you don’t get paid as quickly as you could?

A graphic designer, when she set up her business, gave her clients 30 days to pay once the work was complete. However the major frustration she had was that many times the client stalled the work while she had to wait for their feedback before she could complete it. So not only did the work drag on for longer but she couldn’t get paid until it was all done. I suggested she put in a plan to get paid in instalments over the period of time she expects the work to take.

She asked for a deposit of 50% and then agreed instalments and dates with the client before the work went ahead. She got paid much faster and clients were less likely to stall the work as they were paying for it whether it was finished or not. By changing her conditions she didn’t lose a single client, she got paid faster and her workflow was smoothed out.

So don't hide behind the excuse that in your industry it's just the way it is. There are lots of Business Owners doing something that little bit different from the 'norm' and as a result making more profit, getting paid faster, and getting more freedom.

More sales for less effort

2012-10-16T01:00:00.000-07:00

If you think of what you do as solving a problems for your customer, what other problems could you be solving for them? And what sort of impact could that have on your sales? You surely know by now that I’ll want to talk you through some figures! Let’s have a look, and I’ll use the same figures as my last blog. Your sale is £50 and your customers buy on average 4 times a year (but you’ve now increased this to 5!). However let’s just stick with 4 times just now. If there was something extra that your customers could buy at that point, and it might be an extra £5, that’s £20 per customer. You’ve got 500 customers so that an extra £10,000 in sales. That’s the equivalent of another 50 new customers.

Now I know it’s easy to come out with figures and I don’t really expect all your customers will buy more every time. But can you see how this is worth considering?

It could be that you offer different levels of service to different customers and that’s how you can increase the average spend. There is evidence to suggest that 10% of customers will always buy the most expensive option. If you don’t offer them alternatives you could be leaving a lot of money on the table. Or they may even go elsewhere for that premium service or product.

We’re all familiar with the upsell, for example:

MacDonalds – ‘Do you want fries with it?’

Restaurants – ‘Would you like a drink while you’re looking at the menu?’ ‘Would you like a dessert/coffee?’

Airport parking – ‘Do you want us to park your car for you?’

Hairdressers – ‘Would you like a treatment to keep your colour longer?’

There’s a whole load of others and I’m suggesting if you’re not doing it in your business then you are not solving all of your customers’ problems. Some of your customers are really short of time and would appreciate something to help with that. Some of your customers trust you and are happy to buy more things from you. Some of your customers like to have the best quality. So why not help them?

To be frank if you don’t help them they may think you just don’t care enough and go to your competitor anyway. And you don’t need to provide it all yourself. There may be a like minded business owner you can join up with and recommend (for commission or not) to your customers. They in turn may well return the compliment.

By thinking in a slightly different manner you might not need so many extra leads or new customers. It’ll cost you less to use your existing customer base, you can do it in less time and you can strengthen you customer relationships at the same time.

More Secrets to Increasing Sales

2012-10-04T03:41:00.002-07:00

So how do you get existing customers to buy from you more often? I don’t know your specific circumstance so I’ve got to be pretty general here to try and cover as many bases as possible. But if you look at the maths (I’m pretty keen on this!) it could make a real difference to the sales and profits of your business.

Say you have a product/service you sell for £50 to your customers on average 4 times a year. What happens if you can get them to buy once more from you? That’s £50 more from each customer and you only need 4 of your already happy customers to buy once more from you to replace a new customer. If you have 500 customers then that’s £25,000 in extra sales right there. Can you see why this could be really powerful?

So how can you go about this?

If you’re in retail and you sell to consumers there’s lot of things you can do and I’m sure you’re already doing some of them. For example if you have a seasonal sale and offer extra discounts to your loyal customers. This could be enough to encourage them to come back to you for some extra bits and pieces they wouldn’t normally have bought.And might just give you the opportunity to sell something else to them while they're there.

A general one we can all use is send a newsletter to keep them informed of what’s new (or the new lines you have) and how you can solve a particular problem they might be facing. You may be able to give them some tips that will generate some thoughts about how else they can use you.

You might even be in the type of business where you can give them a call when you know they may be running out of a particular product. Or you know they have a challenging situation you could help them with. This can be used by personal services too eg hairdressers, dentists, beauticians, gyms/trainers ('hello, haven’t seen you in a while').

None of this is rocket science it’s really just looking at ways we can help customers, because after all we’re here to solve their problems in some way or another.

Next time I want to look at increasing customer spend and how you can increase your sales by solving more of their problems (and perhaps ones they didn’t even know they had!)

Increasing sales using your price

2012-09-17T09:07:00.002-07:00

In my last blog I spoke about increasing sales and all the elements that make this up. One of them is pricing and for most of us pricing is difficult. Do you use the following method to price? – more expensive than the cheapest competitor and less expensive than the dearest competitor.

Is that the way to do it? I don’t think so…. we rarely make buying decisions based just on price. If that's the case we wouldn’t buy pre-packaged lettuce (300% more expensive that washing it yourself!), we wouldn’t buy Coca Cola (Pepsi was the preferred option in taste tests!), we wouldn’t buy new cars (we all know 2^nd hand cars offer better value for money!).

So if you don’t buy on price why do you assume your customers buy only on price? I’m afraid it’s all in our mind, so we really need to expand our thinking on this one. After all if you put your prices up by 10% how much more profit would you have in your business? If your sales are £100,000 then that’s another £10,000 in profit. Now you may lose some customers but how many would you need to lose before you made no extra profit?

You would still be less busy for the same profit. What changes could that allow you to make in your business? What other opportunities could you take?

I’m not suggesting you just put your prices up, there are lots of different ways of doing this successfully and this blog is just too short to go into them. I do have free webinar you can listen to that takes you through how to do this. To register go to pricing webinar

Next blog I’ll reveal how getting your existing customers to do one thing could solve your sales problems for ever.

The Secrets to Selling More

2012-09-08T08:13:00.000-07:00

We recently carried out a survey and got some real insights into how people are coping with the current business climate. Many thanks if you’re one of the business owners who've completed it.

What you told us is that business growth is a challenge and over 79% of you were looking for more customers. Getting new customers is one key piece of the puzzle that makes up your sales - but it might not be the most important piece.

The way to think about your sales or turnover is to break it down to its different elements. These are:
- Customers
- Price
- How often your customers buy from you
- How much they buy at one time
- Defection rate ( ie how many of your customers return time after time?)

If you’re always chasing new customers then you might just be pissing off your loyal customer base. Have you ever been annoyed by the great deals new customers get from, say, your telephone provider? Or bank? Or insurance company? You might just be doing the same thing to your valuable customers because you don’t give them enough attention and you don’t do enough to develop customer loyalty.

Why do your customers leave?
The reason they leave and go to your competitor is down to the perception they have of how you treat them. And - that is you don’t care enough about them - 68% of the time that’s why your customers leave.

So just maybe you’re looking at the wrong thing! Do you have a loyalty scheme or offer them something that new customers don’t get? Do you thank them for being customers? Do you even like them? I hope you do and let them know.

It may be costing you a lot of money if you’re losing customers – and you might not even know you’re losing them. Do you measure this?

If you kept 95% of the customers you have and turn some of them into raving fans how much easier would it be to attract more sales?

What ideas could you come up with that would keep your customers loyal and help them spread the word to their friends, family and contacts? Take some time out and come out with some ideas. Let your imagination run riot!

Next blog I'll take you through how to price your product or service and how this can make a huge impact on your profit- in no time at all.

How to do everything and still have time left

2012-03-29T03:01:00.000-07:00

In a small business you wear lots of hats and if you're like me when you started your business you try to do everything yourself.

One day you wake up frazzled and poor and wonder what exactly are you doing? It's called overloaditis. OK I just made that up, but we don't want to spend more money than we need to, right? And it's just not sensible spending money on getting someone else to do something we're no good at and that takes us 4 times as long, right?

As the Americans would say - let's do the Maths! You're doing your own bookkeeping, you hate numbers so you procrastinate for an hour (or two) before you sit down and do it. If you're hourly rate is £50 an hour that's already cost you £50 and you haven't done anything yet!! Then multiply that rate by 4 when you do something as it takes you much longer. So what are we up to for that month? Well let's be generous and say it takes you 6 hours, that's £300 plus £50. How much would it cost for a bookkeeper? Even if they charge the same hourly rate as you it would cost you £75.

You've also lost opportunities - how much could you have sold in that time? Or what else could only you do for your business that would reap rewards?

And don't even get me started on if you answer your own phone. Instead of being interrupted midway through something and answering with a snarl. You could get someone really pleasant to answer and take a message. Freeing you up to do what you're great at.

Don't get sucked into false economies! Do yourself a favour and only do what only you can do....

Cash rich, but time poor

2011-10-19T08:45:00.000-07:00

Are you too busy making money to have the time to enjoy it? I meet a lot of business people in the work I do. Some are really successful. A lot are doing OK, making money but working really long hours and usuallly 6 days a week.

if you're continually tired it’s difficult to keep your momentum going. You may unknowingly give your customer poor service. And sometimes you might think ‘what's the point!’

Your health may suffer as you don't have the time to look after yourself. Relationships with family and friends may suffer as you are short-tempered and resentful of the demands they make. Your business may suffer as you spend most of your time working ‘in’ the business leaving no time for planning for the future.

Successful business people do at least 5 key things to create a business that delivers them great results. Just think how it would feel having more energy, having the time to exercise and eat healthily, having the time spend with family and friends in a relaxed manner.

So what are the 5 keys?

1. Get your price right

If you don’t charge enough you will never make enough profit and you wil spend your time just trying to keep up with your work

2. Delegate or outsource

You can’t do everything so don’t try. Why spend the time learning how to use book-keeping software when you could be marketing or meeting prospects?

3. Differentiate yourself from your competition

Your customers will only choose you on price if there’s nothing that differentiates you from your competitors. Know what makes you special (in the eyes of your customers, not your mum!)

4. Know who your customers are

Not everyone is your customer so you need to pick who you want. This will dictate everything you do in your business

5. Measure what’s important in your buisness

Don’t leave it to chance. Decide what measures are important to your business and look at these regularly (and by that I mean monthly)

If you would like a free copy of my e-book ‘7 Mistakes Small Business Owners Unwittingly Make…. and how to avoid them’ then email gloria@murrayassoc.co.uk

How do you know if you charge enough for what you do?

2011-10-12T06:37:00.000-07:00

Are you cheap? Are you good value? Do you give customers great service? You have to choose which two are important to you as you can’t be all three – it just doesn’t work. Something’s got to give.

Pricing is key to the profits in your business. Over the years I’ve seen so many businesses go out of business because they didn’t charge enough. They ran themselves ragged doing a great job and giving great customer service at really low prices. But in the end it wasn’t enough and they gave up. It was too much like hard work and without the rewards.

So think about what you do. Have you forgotten to charge for something that’s an integral part of your product or service? Is there something that takes longer than you had anticipated when you first set your prices?

Are you being unrealistic about the quality of customer service you can deliver at the price you charge? Please don’t drop the quality of your service, your good customers will happily pay more for this. Do you like crappy service? It costs more but it’s not something you can compromise on.

Do yourself a favour, have a look at what you do and how you charge for it. At the end of the day your customers will choose on price if that’s the only difference between you and your competitors. Give them bloody good service and let them know you care. They will pay more and stay with you longer

How do you feel about change in your business?

2011-09-03T10:21:00.000-07:00

It can be hard to change what you’ve become used to. But in reality business is all about change and reinvention. Nothing stays the same, society changes, what’s hot and what’s not changes. We’ve got to keep up with this or our business will shrivel up and die.

Have you ever seen this happen to any business?

I can think of a few examples in the recent past. Woolworths for one, Oddbins being another. There were undoubtedly lots wrong with them. But the 3 that are easy to see are:

they didn’t move with the times
they did nothing to combat the threats from competitors
they didn’t analyse the way their markets were going

So how do you manage this along with everything else you have to do in business? It’s back to the business cliché – spending time working’on’ your business and not ‘in’ it. In practical terms it means taking time out, at least once a month, to examine what’s happening in your business and create time to think up new ideas. You don’t have to do it all yourself, if you have a team they will be happy to help – once they get used to the idea of being asked!

Get a non-exec, a mentor, a coach, a business friend or someone you know and trust. Ask them to come and spend at least an hour and half with you each month looking at your business.

You can’t see the label when you’re inside the bottle! It’s the same in business – an outsider’s perspective is wonderful. It will hold you accountable for all the things you know you need to do. You will get to see your business through the eyes of a ‘customer’. You’ll have a sounding board for all the ideas you have, the worries you have and maybe the insecurities you have about your business.

Don’t take my word for it, why don’t you try it for 3 months? What harm could there be in that?

Who are your customers?

2011-08-21T11:19:00.000-07:00

Do you give much thought to who your customers are? It’s really easy when first starting your business to go after anyone who will give you some money. Then after a while you find that your time is taken up with lots of customers, some profitable and a lot that aren’t. How did that happen?

If you’re in that situation what can you do about it? Take a big breath and get rid of the customers that give you most of the hassle, don’t pay on time, and want lots of discount. It’s the old 80:20 rule, 20% of your customers probably give you 80% of your profit and conversely 20% of your customers probably take up 80% of your time.

By getting rid of them you can offer the customers you do like a much better service and clear the way to attract the customers you do want. You will have more time to go back to your existing customers and tell them about the other products or services you offer and help them spend more money with you.

You can then think about who your ideal customer is and write a description of them. What do they look like, what age are they, do they have kids, how much do they earn? Whatever is relevant to building up your customer profile.

Once you’ve done that design your marketing to attract them. Your customer profile will dictate how and where you market and advertise. By the end of this process you will have a better business and you’ll enjoy serving the fantastic customers you have.

Why are YOU in business?

2011-08-11T10:34:00.000-07:00

Did you ever feel there was a ‘why’ missing from your business? I don’t mean the money or the freedom but maybe something a bit bigger! How can you design a business that not only gives you what you want, what your customers want but that can give back too?

The future

I’ve seen the future of business and it’s really awesome. In fact WOW!! Have you heard of B1G1? I hadn’t until I went to an accountant’s conference recently. I know what you’re thinking, nothing inspirational happens in the accountancy world – but you’d be wrong.

Paul Dunn, an internationally famous inspirational speaker told us how this came about and I struggled to keep the tears from my eyes. I came away more fired up than an accountant ever should be and now I know I can play a small part in changing things for the better.

How?

B1G1 stands for Buy 1 Give 1 and it’s a way that business owners can involve their clients and employees in specific charitable projects. So for instance if you are a café every time someone buys a coffee they could give clean water to 1 person for the day in Malawi or Ethiopia. Did you think you could make a difference like that by buying something?

100% of the money goes to the project, it’s not swallowed up by admin fees. As a business if you want to join you pay a fee and that goes towards the admin. I’ve signed up on behalf of Murray Associates and in the past month we've sent 45 kids in Nepal to school for a month.

I am so excited I can hardly contain myself. I’ve found my ‘why’ and I’ve been waking up everyday thinking about who else I can tell about this. So now I’m telling you. Check out www.b1g1.com and see what you could do to make a difference.

Turnover or Profit, which would you choose?

2011-08-04T01:37:00.000-07:00

Turnover is vanity profit is sanity! You’ll always hear me saying this.Why? Because it’s easy to have £1m turnover and not much profit. You can be a busy fool, so the profit is of major importance.

Being an accountant I’m always around business people and I love to hear about their business. But as soon as I hear someone bragging about their turnover I get alarm bells ringing in my ears.

Don’t just set goals for your sales make sure you have a profit target as well. It’s really easy to make unprofitable sales – it’s called giving it away! What’s the easiest way to make a loss? Don’t charge enough for what your doing. So make sure you’ve got a really good handle on how long things take to produce or service. Look at your whole process and what’s involved.

It can be too easy to think about your profit in terms of an hourly rate and compare that to a salary. Remember if there’s only you in the business then you can’t spend 35-40 hours a week producing or serving your customers. You’ve got admin, you’ve got quotes, you’ve got meetings!

In general, one third of your time will be spent generating the money and two thirds doing everything else. Doesn’t look quite as generous now, does it? Set your profit targets and then work out how you can get there. And if you’ve got incredibly tight gross profit margins I would look at what you’re doing and ask if it’s worth all the hard work.

Are you giving money away?

2011-05-16T05:02:00.000-07:00

Do you discount? Do you cave in as soon as someone asks for a discount? Or do you play the game of negotiating? And if so, how pokerfaced are you? Let me take you through an example of discounting that caused problems for its owner directors.

Once upon a time there was a business with a turnover of £2m and profit of £50k. The three directors were not happy as they worked long hours and didn’t get much money for all the work they did. They had done everything they could to cut their expenses but they still couldn’t make a decent living. Once they started digging deeper into what was happening they discovered that their sales team were giving discounts of over £1m. Too strong to say they felt gutted? All the sacrifices the directors had made to sustain the business without having any rewards for themselves suddenly hit home.

However they knew the rules of leadership – the buck stops with them. They didn’t sack the sales team or rant and rave. After all they weren’t measuring anything! It became really important to measure those discounts, show the team the parameters they could work to and ensure a monitoring system was put in place. Not only that they gave their team extra sales training and specifically a workshop on negotiation skills.

Equally important they also put any discounts negotiated on their sales invoices. The reason was twofold, it made it easy for their management accounts to see how they were doing but also reminded their customers about the discount. Upshot was it ensured future sales negotiations with the same customers did not start at the discounted price but at the list price.

Don’t think your team know everything, whatever part they play in your business you must make training a part of what you do and guess what, that costs money – see my future blog on getting the price right.

So don't throw money away. Ensure you have thought about your discount policy and measure it.

We're producing a booklet 13 Mistakes that Small Business Owners Unwittingly Make which includes tips about pricing and it will be out on 30th June 2011.

However if you are interested in getting the booklet email Carolann@murrayassoc.co.uk and if you register your interest by 31^st May you can get it for Free (Normal price £5.95 incl. postage & packaging).

We are also hosting our regular Aberdeen Business Growth Club in Lloyds TSB Boardroom at 33 Queens Road Aberdeen on Thursday 19th May from 9 - 11:30am. The presentation is on Knowing Your Numbers - the fastest and easiest way to understand the numbers in your business.

If interested in this event please book asap as places are limited by emailing Carolann@murrayassoc.co.uk or book online at http://www.murrayassociates.co.uk/events.htm

Will you be fined £3k by the tax man?

2011-04-14T06:03:00.000-07:00

I haven't seen an enquiry at my practice for at least 2 years but that's all about to change. HMRC are targeting 50,000 small businesses each year and they are planning to check your record keeping for accuracy! You must keep till rolls, sales and purchase invoices, paying in slips, cheque stubs and bank statements for 6 years.

If HMRC assess your records as inadequate they can fine you £3k. They will probably start an investigation into your previous years’ tax returns as well. After all you've just given them a good excuse to doubt the accuracy of your records.

Over the years we have seen several investigations, all on small businesses. In one case this resulted in the client owing HMRC £10k. I didn't handle this investigation for this particular client as he had other insurance. However after reviewing the case myself I think I would have got a better result.

These investigations can drag on for years and can result in hefty fees for the work your accountant does for you, even if no tax is due. Another client had 3 investigations over 3 years. However none of these resulted in extra tax due but they still had to pay our fees to argue and negotiate with HMRC on their behalf.

The vast majority of successful businesses keep in close touch with the numbers in their business and revisit them regularly. This means that they not only remain compliant but are able to act on things very quickly to keep their business in good health.

However, you don't have to do it all yourself, ask your accountant or get a good book-keeper. Just make sure you can access your information quickly and easily or have regular meetings with your accountant to look through your management accounts and discuss how the business is doing. There are other things you could measure that will tell you how your business is doing and how it will do in the future. I'll talk about that in my next blog.

So please make sure you’re keeping accurate records. I'm so committed to helping you keep on track that I want to offer you a free health check on your record keeping - normal cost £185 + VAT. Want to find out more? Ask carolann@murrayassoc.co.uk or give her a call on 0141 889 4247 or 01224 432184.

I'm running my regular Business Growth Clubs specifically on Knowing Your Numbers in Glasgow on 21st April and then in Aberdeen on 19^th May and I'd love to see you at one of the events.

The first one is free. To book a place email carolann@murrayassoc.co.uk or via our website http://www.murrayassociates.co.uk/events.htm

Can you save some tax?

2011-01-11T07:15:00.000-08:00

January is a great month for planning. Hopefully you came back from holiday suitably refreshed and with grand ideas on what you want to achieve in 2011. In the last blog we looked at setting personal and business goals. This time I want to talk about tax planning.

No matter how big or small your business it’s a great idea to have a look at this well before the end of the tax year on 5 April 2011 and at your accounting year end, if they're not the same. The very nature of tax means it is almost impossible to rearrange your tax affairs retrospectively.

So what can you do instead? Start planning now! If you’re a client we’ll be sending you out a Tax questionnaire so we can have a look at your options for you.

Generally there is something that can be done for a lot of sole traders, partnerships or directors to save them some tax. Sometimes it’s just looking at the timing of things you were planning on doing anyway to ensure you get the relief as quickly as possible eg a new van or bit of equipment, employee bonus etc.

It’s also possible to do some of this tax planning in conjunction with other things like tax credits. To give a simple example - if you are a sole trader and normally you have a profit of £30k. You need a new van costing £10k and because of the Annual Investment Allowance the £10k would drop your taxable profit to £20k. You may then find that you’re eligible for tax credits due to your drop in normal income. You would also save on tax. The van could be paid for by loan and you would still get all the tax advantages upfront.

Here are a few more ideas:

1. If you are considering significant capital or revenue expenditure during April 2011 or later in 2011 you may want to see if you can bring the payments forward and claim tax relief in the accounts to March 2011. This may involve you funding the payments earlier but you may possibly benefit from reduced tax bills a year earlier.

2. Following on from point 1, there are still generous capital allowances for purchases of equipment that qualify for the Annual Investment Allowance. The annual limit is set at £100,000 until April 2012 when it will be reduced to just £25,000.

3. If you are carrying stock on your balance sheet at cost and it is now worth less than cost, you should revalue, reducing the stock to its current realisable value. This will reduce your trading profit in the current year or increase your losses; it will also reduce your tax bill or increase any loss relief carry backs.

4. If you are considering the sale of a business or business property that will create a chargeable gain for capital gains tax purposes, you might be advised to delay contracts until after the 5 April 2011. For individuals, any tax payable on gains made on or after the 6 April 2011 will not be due for payment until 31 January 2013. Tax payable on gains on or before 5 April 2011 will be due for payment a year earlier, 31 January 2012. At present CGT rates are still 18% or 28%. Also if your gain qualifies for Entrepreneurs' Relief your CGT liability will be reduced to 10% of gains - up to a lifetime maximum of £5m chargeable gains (for disposals after 23 June 2010). Of course it is always possible that capital gains tax rates will be increased in the 2011 Budget.

5. Consider your pension options. Could you make additional contributions before the 6 April 2011 to reduce your higher rate tax this year? But beware of the anti-forestalling provisions if your income is more than £130,000.

These examples are only given as guidelines and shouldn't be taken as advice. I have no way of knowing individual circumstances.

There are several other ways of planning for individuals and directors too. However tax is very complicated and there is a lot to take into consideration when doing any planning. In fact if you are not a tax expert it’s often a case of ‘its not what you know you don’t know, but rather what you don’t know you don’t know’

If you’re not a client and you would like me to carry out a review for you then please email me at gloria@murrayassoc.co.uk and I’ll send you out a Taxability questionnaire. We normally charge £350 + VAT for this but I will waive this fee for the first 10 completed questionnaires I get back. Get planning and save yourself some tax!

Have you got your holidays planned?

2010-12-30T10:37:00.000-08:00

Do you spend more time planning where you're going on holiday than you do on where you want your business to be in the next 1 year, 3 years or 5 years? If so you're not alone! However most successful businesses, big or small, all have a plan of where they would like to be in the future.

It just takes time, outwith your day to day running of your business, to sit down and ask yourself some key questions:
how do you see your business in the future?
what does it sound like?
what does it feel like?

It doesn't matter what your timescale is but it is important to have one, be it a year or longer. You can then break it down into more manageable chunks and look at how you're going to achieve it.

Not only that but you can check that your personal and business goals are congruent - they compliment each other and don't fight each other. If you have business partners then it's a good idea to check you have complimentary business goals. I have come across directors or business partners with completely different goals many times and none of them have survived without a radical rethink of their goals and roles.

None of this is rocket science and you will have heard it all before. Use some time during the holidays to examine what you want from your business and your personal life and start planning. What have you got to lose? If you haven't a clue where to start drop me an email and I'll send you a goal setting pack. Check out my contact page to email me.