The financial side of things can be particularly stressful when all you want to think about is progressing your business. Funding, cash flow, profit and loss statements can all place a weight on your shoulders, but it needn’t be a burden.
Planning and preparation is all part and parcel of running a successful business. It might not be all smooth sailing, but if you do a bit of financial forward planning early on and keep everything as organised as possible, you can soften the blow of potential stress later on.
First thing’s first, have a think about what you want to achieve. Do you want to safe-guard for the future? Maybe you’re looking to save to make an investment?
Your business plans should cover a wide array of aspects that make up your vision. You should plan ahead for marketing, sales, promotions and particularly financial breakdowns of costs and profit predictions.
The importance of budgeting
Insufficient funds are the most common cause of businesses failing. Not having enough cash flowing through the business can prevent you from taking up opportunities to grow your company and over time, this can have a negative effect on your turnover.
However, careful budgeting will help you to build your business and it’s the best way to prevent money problems from standing in your way.
Regularly reviewing your bills to ensure that they are correct and to find out whether any savings can be made can be a great way of analysing your spending. You may often find that you have been spending money unnecessarily or wasting it on things that you can control and cut back on.
Cutting back on electricity is another way to save a bit of cash, which can be freed up for other aspects of your business.
Have a think about extra expenditure that burns a hole in your pockets each month. Do you spend a lot on expenses such as client dinners? Do you often have to pay for faulty machinery or equipment to be repaired?
If your business is expanding and you’re recruiting for more employees, have you factored their wages into your budget?
There are some fantastic tools online to help you to budget and encourage cash flow without locking too much money away.
Improve cash flow
If you find that there’s little leeway once you’ve added up and analysed your incomings and out-goings in comparison with your projected cash flow, then you may need some assistance. Cash flow is business essential and is crucial for survival and development – but in today’s economic climate, it’s not unusual for only the strongest to survive. Many banks and building societies can work with you to inject extra cash into your enterprise to help you to realise your dreams.
There are various options available and if you feel that you need some assistance, it can be worth discussing your situation with potential lenders. One of the most popular ways in which banks can help businesses to free-up cash is by purchasing any unpaid invoices that you may have so that you can quickly gain access to the funds.
There are two types of invoice finance; debt factoring and invoice discounting. Factoring involves the lender managing your credit control function for you and chasing the money that you are owed, an ideal option if you are a smaller businesses, with finite resources you’d rather spend on evolving your business. On the other hand, invoice discounting allows you to continue all contact with your clients to collect payment, an option more suitable if you have a larger business with an established credit control department.
To save money over a period of time without locking too much away you could try putting it into a dedicated business savings account.
To be eligible for a business savings account you must meet
the following criteria:
- Be a Limited Company, Limited Partnership, Limited Liability Partnership, Partnership or Sole Trader
- Be a UK-registered business for tax purposes
- Be a UK resident aged 18 or above
- Have a nominated account – a business bank account that allows transfers to be made and received electronically.
You will need to provide your bank with details of your nominated account including your account number and sort code.
Usually, you can open multiple business savings accounts as long as they are all set up in the same way and have the same users
Most banks will have a minimum amount that you will have to save in your account, this may be along the lines of £1,000, for example.
To fully benefit from a business savings account, think about what it is that you want to achieve. What is the best way of achieving your goals without putting your business at risk financially? Investigate all options that are available for you so that you can find the right one and fully make use of its benefits.
It’s perfectly normal to have money tied up in other things such as wages, bills and unpaid invoices, so if you haven’t got lots of money available to spend on other things, then an easy access account may be most suitable for you. However, if you do have surplus cash, then a fixed rate account with a better interest rate may be more appropriate.
Easy Access Business Savings Account
If you want a flexible account which allows you full access to your cash, then an easy access business savings account may be the option for you. You’ll have full control of your cash and will earn at a competitive rate.
Fixed Rate Accounts
This type of account offers you a guaranteed rate on your savings on a choice of terms. If you’d rather know exactly how much interest you’re going to earn and would rather have no fluctuations, this option could give you peace of mind.
It’s also commonly a fast and easy way of opening an account, freeing up valuable time for you to spend on other aspects of your business.
Building your own business from scratch can be stressful enough without the hidden worry of managing your finances. But sadly, your financial situation needs to be taken into account. To minimise the amount of time that you have to spend scouring for the right solution for you, contact us for expert advice regarding business savings accounts. We can help you to achieve whatever it is you have planned with an online saving account that fits you and your situation perfectly.
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