Small Businesses And The 2010 Budget
The 2010 emergency budget has not brought much help for the average small business in the UK. Most small businesses sell direct to the public, so they needed a budget that gave their customers more disposable income. Raising VAT to 20% has had the opposite effect. When you combine this with the fact that around 600,000 people will lose their jobs because of the cuts announced you have a recipe for disaster.
All small business need good cash flow to be able to stay in business. If cash stops coming in a business can very quickly go under, sometimes within a matter of months. A good accountant is essential to help you to manage cash flow. Experienced accountants will help you to map and monitor you cash flow as well as to suggest ways in which you can improve it. They will also find better ways of paying for stock that reduce the impact of a slowdown in cash flow on your business.
Big companies can weather a period of financial crisis more easily than small companies can. They have greater assets, which they can use to borrow against and they also have larger margins, which can be cut to take them through the lean times. However, there are still areas where small businesses can make savings; good accounts are essential to help identify where those cost savings can be made.
The freezing of business rates or the subsidising of commercial rates were two hoped for measures that were not included in the 2010 budget. Those measures would have really helped existing small businesses and people who want to set up a new business. This means that small businesses need to work out ways of reducing those overheads, themselves. Moving to smaller premises is perhaps the most obvious way of doing this. Your accountant will need to help you to consider the true costs of moving and understand if you will actually benefit once the cost of moving have been taken into account.
Reviewing your business plan with your accountant after a budget is important at the best of times. In the current climate it is even more important that you understand all the implications that the budget has for your business.
Learn more about improving your cash flow? Visit Accountancy Extra for the best accountants in Leeds and the best accountants in Halifax.
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