One thing can lead to another, and before you know it your company is in need of a big financial clean up. Financial problems are the main downfall of any business that falls. Take Carillion as an example. Millions of pounds worth of debt being left pretty much unhandled, this eventually led to the downfall of a multi-million pound company going into administration, thousands of jobs lost, and a good company that will most likely never surface again. So, if such a big company like this can fall to the ground, how easy is it going to be for a smaller company like yours to do the exact same? The answer is very easy if you’re not keeping your finances in order. So, we’ve got some financial clean up ideas that your business might be begging for you to do. Have a read on to find out more.
Shareholders
You’ll most likely have one or two shareholders in the beginning. Someone who has invested money into your company, with the hope of having a decent enough share from it to make their money back. As your company grows and grows, you’ll have more shareholders purchasing shares of your company. It’ll likely be other business owners, or the general public that might just be interested in using their money wisely on some shareholder investments. But, the one thing some companies forget to do is re sell the shares in their company once one shareholder moves on. They’re likely to move on if they want to invest their money elsewhere, or they may have passed away etc. Removing a shareholder from your company isn’t hard to do, but it’s something that is essential if you want to keep the running of your company nice and smooth. Shareholders are a type of investment into your business. They’re a little bit of extra cash that you can have to keep your ship afloat. Having that one small gap when one shareholder moves on can be all you need for your business to start wobbling a little. Advertise and find a new shareholder pretty much as soon as the other one leaves.
Investments
Once you’ve got to the point where you’re bringing in enough money to pay your employees, sell your products or services, and have enough to give yourself a generous monthly salary, you should start thinking about investment ideas. All businesses invest when they get to the point where they feel they can, and for good reason. Investments is one of the easiest ways to bring in an extra income for your business. This extra income is often enough to keep your business stable, or the return could be high enough for you to invest back into your own business to improve it for the better. There’s so many different investment ideas that you can choose from, one of the main that businesses seem to chose is other businesses or industries. For example, the oil and gas industry is one that a lot of businesses have invested a lot of money into. However, investing in a small business might be a better option as you can suggest the return you’d like to have from the investment. With bigger companies in industries such as oil and gas, the price is usually controlled by them.
Taxes
Taxes are something that a lot of businesses fail to manage. If you do it wrong, you can have massive fines and implications for the business. One tax that so many companies get wrong is business tax. It’s one big bill at the end of the year that can often hit a lot of small businesses in the face like a brick wall. The more your company makes, the more tax you’re going to have to pay. So, the best way to do this is to save all year round for it. Don’t just wait until the last minute, and always have an accountant on hand to help you through the process. An accountant can ensure that you know which payroll taxes you must pay, will know what is futa, and what you have to do to be compliant. There are so many different rules to follow, if you get them wrong it can put your business in a sticky situation.
Debts
Debts are something that nearly all businesses have. When you first start off your company you’ll need a business loan no doubt to start your company. There’s nothing wrong with taking one out, but making sure you clear it down should be your number one priority. There will be minimum payments, and there will be interest charges if you miss those payments. The sooner you get it gone, the sooner you can use the money to invest back into your company.