The Dreaded Thing… Money

It’s nearly April and that means the dreaded words start to be whispered: the end of the tax year.

Money is something that a lot of people from my generation were told not to speak about, that we should be knowledgeable yet silent about our finances. But that helps nobody in business. I have always found that being aware and engaged with money is extremely important when running your small business. Money mindset is real, and we need to tap into it.

It is vital you know your numbers and you know the vocabulary. This can be a real oversight for business owners and a big barrier for new businesses, as people become fearful to start a business because they don’t have the financial knowledge, and they don’t learn the power of money and the emotions it can evoke.

I’m not mathematical. But after years of working in the television industry and having to budget productions of up to a million pounds, I can manage a budget. I find it very hard to think about tax and projecting money into the future. I’m not good at it and I certainly don’t enjoy it. So, I outsource to professionals. If you procrastinate and take ages to complete financial tasks that’s not a good use of your time.

Five business mistakes I see when people get this wrong is:

1. Not knowing when they’re going to reach their VAT threshold and end up getting an unexpected big bill some weeks or months later – save the damn money.

• Not invoicing on time. This can damage your cash flow, but also means you are not mindful of other businesses’ budgets. A £2000 invoice covering months of work, is less manageable than a monthly expected invoice. It is not fair.

• Being afraid to chase for money. Everyone deserves to be paid on time, and if they are having difficulty with paying, they need to talk to you. Remember it’s your money in their bank account.

• Not talking about money! It seems like the most basic point, but the more open and honest a business is about money, the more help and support you can gain. Additionally, if your business is doing well, it’s important to talk about it and encourage development and possible investment.

From this month, small businesses across the UK are going to be hit with National Minimum Wage and Living Wage increases.

National Insurance contributions will be going up and every business that employs more than a handful of people will be paying more money regardless of whether they’ll be making more sales.

For small businesses this is very tough, there will be job losses, and more money will need to be found every month.

This needs to be a priority and you need to be ready. Knowledge is power, and if you don’t have the knowledge, seek out those who do. If you do have this knowledge – share it – it’s a classic media moment!