Tag: small businesses

Brexit- How will it affect small businesses?

Although it is currently hard to say how Brexit will affect small businesses in Ireland, or whether it will be a ‘hard’ or ‘soft’ exit, it is imperative that we are prepared for it.do

Brexit

How Challenging will Brexit be?

Brexit will be challenging for us, however it happens. In general terms though, the harder the Brexit, the worse it may be for us, as the greater the break between the UK and Europe, the bigger the threat to our trade between the UK and Ireland.

The volume of trade between Ireland and the UK, estimated at over €1 billion in goods and services being exchanged between our countries on a weekly basis, means that Ireland will want to keep trade with our neighbours as open as is possible. But at the same time there are rumours about businesses and State Bodies wanting to capitalise on the move of multinationals out of the UK, should this arise. It has been reported that the IDA have approached over 1000 multinationals to assure them that Ireland’s future remains aligned with the EU. Government sources have also, once again, reiterated Ireland’s commitment to the 12.5% rate of corporation tax.

So at one end of the extreme, “hard” Brexit could involve the UK refusing to compromise on issues like the free movement of people even if meant leaving the single market. At the other end of the scale, a “soft” Brexit might follow a similar path to Norway, which is a member of the single market and has to accept the free movement of people as a result of that.

Brexit
Brexit Diagram (credit BBC Website)

A little background to Brexit:

The European Union is a group of 28 European countries that are tied by an economic and political alliance. This political understanding led the way for the use of the euro (the currency used in 19 EU countries) and permits citizens in the EU to travel between countries easier. The EU even employs its own parliament and makes decisions regarding things like trade, transportation, and environmental policy.

The EU allows the countries within it to function largely as a single entity. It was initially put in place to allow for the free movement of people, goods, and money under what it termed a “single market.”

The European Union single market, which was completed in 1992, allows the free movement of goods, services, money and people within the European Union, as if it was a single country. It is possible to set up a business or take a job anywhere within it. The idea was to boost trade, create jobs and lower prices. But it requires common law-making to ensure products are made to the same technical standards and imposes other rules to ensure a “level playing field”.

What can we do as businesses to protect ourselves as Brexit progresses?

  • Look at every aspect of your business from a “Brexit” perspective:
  • What UK links have you got? Are they purely UK based?  Talk to them.
  • Protect your supply chain.  Customs may add additional taxation on imports.  Can your margins allow room for this?
  • If you have UK employees, make sure you are up to speed on legislative complexities of HRMC.  The UK Revenue office have, in the last number of years, brought Tax right up to date, and this will help.
  • Examine your Customers, you may have to look at new markets now to be prepared in case there’s an exodus.  Take this as an exciting opportunity to re-evaluate your business goals and direction.
  • Take a breath, there’s still time to make changes.  Be pro-active.
  • Have a look at our own Governments suggestions.
  • Talk to your accountant and tax advisor.

And don’;t leave it too late….

 

 

 

 

 

 

 

How Small Businesses Should Manage Accounts

Thankfully the number of Small Businesses in Ireland is on the rise again.

Over the past five years this number has grown – especially since the recession, where more people have been made redundant or have found themselves struggling professionally – a situation which has lead many to become entrepreneurs.

But even though setting up a business is a very exciting new chapter in life, the first and most important step is to get the basics right.  And even to know what the basics are is a struggle.

You don’t really need to be a maths wiz to successfully run a small business, all you need is a basic understanding of bookkeeping and finance.  And now you don’t even have to know that.  I always tell people that Sage is built for people who AREN’T accountants.  So you can concentrate on growing your business.

My top tips for a running your accounts as a small business are:

  • I recommend keeping your personal and business accounts separate.  It’s easy for your personal finances to get tangled up with your business finances. But no matter what type of business you’re running, it’s a good idea to keep your personal finances separate from those of your business. If you have separate bank accounts , all you have to do is review your bank statements for a clear picture of your cash flow, which is for me, a clear picture of how the business is doing on day to day.

accounting software package and payroll system offer

  • Invest in Small Business Accounting Software
  • Know your costs- When you start a small business, you will have two types of expenses: fixed costs and variable costs. Fixed costs do not change with sales volume, but variable costs do. Fixed costs are the costs associated with your business’ product that must be paid regardless of the volume of that product or service you sell.As sales go down, variable costs go down. Variable costs are costs of staffing or materials that change with sales. Small Businesses need to keep a very close eye on both costs.
  • Make payments easy for customers.  Accepting Credit cards and setting up Direct Debits is so much easier these days.  More on this in future blogs. But I like to use Paypal and SumUp.

Small Businesses

  • I always try to Agree Clear Payment Terms. The best way to ensure you get paid on time is to have proper credit management practices in place that increase cash flow into your business and minimise the risk of not getting paid. This includes putting contracts in writing at the outset that contain fair and realistic payment terms that both sides can live with.
  • Use your stock control
  • Get organised- Be OCD about it,  There’s no point in wasting valuable time lokoing for that invoice.  That’s why the latest innovations in Sage One appeal to me.  They have an #AI named Pegg.  I can upload my lunch/ diesel/ miscellaneous receipts to Pegg via messenger.  No more worrying about emptying my wallet every week. Perfect for Small Businesses.

 

 

and my top tip;

  • Invoice Quickly- follow up- get your money