Small gains over time helps to build strong cash reserves but likewise small costs add up over time and could lead to insolvency if left unchecked. As businesses grow they accumulate costs but forget what they are paying for. Often they incur those costs because they think that their time is more important and it may be but when things are tough you need to mend that leaky bucket while the holes are small and you still have some water left. Otherwise when you finally realise that your bucket is almost empty you are more likely to be scammed by those who promise that they can find thousands in hidden cashflow and they can do it in just a few days. It's their own cashflow they really worry about not yours. #cashflowmanagement #futureproofbusiness #buildingawesomefutures https://lnkd.in/g_-2xe8
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Navigating financial uncertainty as a business leader? Understanding the difference between administration and liquidation can be your guiding compass. Liquidation winds up your business, selling assets to pay off debts, often marking the end of the road. Conversely, administration offers a lifeline, potentially rescuing your business by restructuring debts under expert guidance. Here's why this matters: With the UK economy facing turbulent times, many businesses are caught in this crossroad. A recent report from The Insolvency Service highlighted a sharp increase in company administrations, hinting at a strategic pivot towards business recovery over closure. Key distinctions include: - **Objective**: Liquidation ends operations; administration seeks to revive them. - **Control**: Liquidators take charge vs. administrators who might temporarily run the business. - **Legal Protection**: Administration offers a moratorium, shielding from creditor actions. Ask yourself: Does your business have salvageable value, or is closure inevitable? Proactive dialogue with a licensed insolvency practitioner is crucial in charting your path forward. Have you strategically pivoted or encountered a similar dilemma? Let’s discuss. Share your thoughts, and feel free to reach out if you’re seeking tailored advice for your business’s financial trajectory.
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4 Key Accounts We Opened Before Buying a Biz to Run Them Efficiently ⬇️ 1️⃣ Business Operating Account This is our main account for daily operations. We keep 1-2 months of operating expenses here to manage cash flow and ensure all bills are paid promptly. Keeping these funds separate helps us stay on top of our spending and cash management. 2️⃣ Profit Account We follow the Profit First method by dedicating an account solely for profits. A percentage of all revenue is deposited here first. This ensures we prioritize profitability, rewarding the business and its owners before paying expenses. 3️⃣ Tax Account To avoid any surprises at tax time, we set aside a percentage of our income into a tax account. This allows us to meet our tax obligations without stress or dipping into other funds. 4️⃣ Business Savings Account (Emergency Fund) Our safety net. We maintain a minimum of 6 months of business expenses here to cover any unexpected financial challenges. It provides peace of mind and stability, letting us focus on growth. 💡 Bonus Account: 5️⃣ Growth and Investment Account This account is for funding our future business goals — acquisitions, expansions, and strategic investments. After covering essential expenses and setting aside for taxes and emergencies, extra funds go here to fuel growth opportunities. 6️⃣ IRA We set up automatic transfers from our business checking account to each of our IRAs every month. This strategy ensures we’re building for the future while managing our present-day finances effectively. P.S. If you’re in a partnership, be cautious about combining finances without proper agreements. Partnerships don’t have the same legal protections as corporations. I formalized mine early on, but every situation is unique. If you’re planning to buy a business or want to grow yours, follow me for expert insights, tips, and M&A strategies to ensure your success! #ProfitFirst #BusinessFinance #SmallBusinessTips #Entrepreneurship #BusinessGrowth #RealEstateInvesting #AITools #Leadership
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Five mistakes most business leaders make with their finances - https://lnkd.in/eqeTqfcV
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Is your business experiencing a cash flow crunch? Don't let it derail your growth! Our latest blog post provides practical tips to improve your cash flow and ensure your business's financial stability. Check it out: https://lnkd.in/gkxstwEh #cashflow #businessfinance #accounting #smallbusiness #entrepreneurship #financialplanning #businesstips #moneymanagement #financialadvice #CPA
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The vast majority of UK businesses by number and by employees are small to medium size enterprises (sub-250 employees). Small businesses have significant advantages over large businesses, the biggest risk though, remains their size. Very often there is a key individual (sometimes the founder) whose loss would lead to the business being wound-up immediately. In our latest blog post, we explore the benefits of giving more thought to your business when drafting your will. https://lnkd.in/efKzS8XQ #financialadviser #wills #businessowner #founder #financialplanning #taxplanning #altorwealth #willdrafting
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