{"id":2094,"date":"2024-09-09T16:25:22","date_gmt":"2024-09-09T15:25:22","guid":{"rendered":"https:\/\/ctt-group.co.uk\/accountancy\/?p=2094"},"modified":"2024-09-10T10:53:42","modified_gmt":"2024-09-10T09:53:42","slug":"tips-for-managing-money-when-starting-a-new-business-in-the-uk","status":"publish","type":"post","link":"https:\/\/ctt-group.co.uk\/accountancy\/tips-for-managing-money-when-starting-a-new-business-in-the-uk\/","title":{"rendered":"Tips for managing money when starting a new business in the UK\u00a0"},"content":{"rendered":"
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Getting through the first year of owning and running your business is going to be an exciting and gruelling challenge. There\u2019s no way to sugar-coat it: it\u2019s going to be hard work!<\/span>\u00a0<\/span><\/p>\n

Finances are an aspect of your business you\u2019re going to have to be on top of from day one, and in truth probably long before that as well.\u00a0<\/span>\u00a0<\/span><\/p>\n

Starting a business in the UK takes preparation, dedication, and a huge amount of effort. If the end result is successfully building something of your own, and hopefully, a stable revenue stream to boot, then it\u2019ll all be worth it!<\/span>\u00a0<\/span><\/p>\n

Here are some handy hints and tips to help you navigate the crucial first year of running your own business.<\/span>\u00a0<\/span><\/p>\n

Make a business plan\u00a0<\/strong><\/h4>\n

Surviving as a business relies on a few foundational things, one of which is a financial plan to help you weather the first few months with some idea of what your finances will be ahead of time.<\/span>\u00a0<\/span><\/p>\n

Creating a comprehensive business plan to project your finances up to a year is helpful but it isn\u2019t always necessary. Your need for a business plan largely depends on the state of your finances when you begin your business.\u00a0<\/span>\u00a0<\/span>\u00a0<\/span><\/p>\n

If you are able to start with a substantial fund behind you already, a financial plan won\u2019t be as vital, since you will have time to build a client base and the ability to simply wait until you\u2019re able to build up regular customers.<\/span>\u00a0<\/span>\u00a0<\/span><\/p>\n

If you aren\u2019t that lucky, and need to account for every penny, then a business plan becomes much more essential. No matter your starting financial situation, it certainly won\u2019t harm you to spend some time creating a financial plan, after all, no one likes to lose money!<\/span>\u00a0<\/span><\/p>\n

When it comes to creating the plan itself, be as conservative with your estimates as you can while being realistic. In general, it\u2019s better to underestimate profits and overestimate expenses, helping to ease your expectations for the first few months.<\/span>\u00a0<\/span>\u00a0<\/span><\/p>\n

Separate personal and business finances\u00a0<\/strong><\/h4>\n

When you begin working for yourself it can be easy to forget there should be a clear delineation between money earned for your own use and money earned for the business.<\/span>\u00a0<\/span>\u00a0<\/span><\/p>\n

If, before you began your new business endeavour, you worked for a regular wage, the switch to business ownership can be quite jarring. We would recommend deciding on a wage for yourself and then taking that out of your business\u2019s income, leaving the rest for reinvestment back into the business.<\/span>\u00a0<\/span><\/p>\n

Pay the monthly salary into a personal bank account as if you were being paid by a company you worked for, rather than one you run. It is a bit of a psychological trick, but it will give you better self-control with your finances and give you an improved chance of sticking to your business plan.<\/span>\u00a0<\/span><\/p>\n

There are also tax implications, with tax benefits for small companies that retain profits in the business itself rather than paying the business owners.<\/span>\u00a0<\/span><\/p>\n

Keep financial records to track expenses\u00a0<\/strong><\/h4>\n

Accounting for all of your expected outgoings is a tough challenge for any business. Ideally you would do this as part of your business plan, though there are likely to be expenses you simply won\u2019t be able to account for ahead of time.<\/span>\u00a0<\/span><\/p>\n

Expenses to account for include:<\/span>\u00a0<\/span><\/p>\n