Category: Business

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Tax Tip

As we go into the new tax/payroll year don’t forget to tick the box to claim your Employment Allowance to offset your employers’ national insurance. From 2025/26 this is a maximum of £10,500 per year.

Most small companies can claim unless:

  • You have just one director and that director is the only employee above the secondary class 1 NI limit (currently £5,000pa from 2025/26)
  • If you have a group of companies then only one company in each group can claim the allowance.
  • If more than half your work is in the public sector then you can not claim the allowance.
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How much cash should I keep in my business?

Another question to which the accountants answer is … it depends.

It depends on your cashflow forecast and the likelihood of all the money coming in on time. Next week I’ll give some tips on what to include in your cash flow forecast if you’ve never done one before and also some software recommendations if you need to prepare regular cash flow forecasts.

The general guideline is to keep instant access to a minimum amount that is enough to cover 3 months of costs.

If you’re a pre-revenue startup dependent on funding (common in the tech sector) then you will also want to track your run rate. This is the number of days’ cash that you have in your business. Work out your average daily costs and divide your cash balance by this amount.

If you are holding over £50k on deposit then Allica Bank are currently offering some good deals (they’re not paying me any commission 😉)

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Why do we have an annual price increase?

Once a year we increase our prices across the board. This is in addition to increasing/decreasing prices as clients increase/decrease the services that they need from us. As most of our clients are on annual fixed price agreements that they pay monthly they aren’t affected immediately, others are increased from 1 April.

But why do we have an annual price increase?

We have a fabulous team and I want to make sure that they are rewarded accordingly so we pass on the same increase to them as a pay rise. Our software and other costs increase throughout the year so we need to ensure that we cover these in order to retain our margins and stay in business.

As business advisers we also advise our clients to review their own prices annually.

If costs are tight it can be tempting to cut corners on the necessary work or to take on too many clients in order to cover our fixed costs. The resulting reduction in service would not be in the best interests of our existing clients.

When was the last time you reviewed your prices?

If you’d like more information about how to go about reviewing your prices then have a look at our pricing course.

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Client retention

When thinking about growth it is all too easy to focus on acquiring new customers. But it is important not to neglect our existing customers too.

Does your insurance company do the same as mine and offers better deals to new clients than to renewing ones. After I’ve shopped around and told them that I’m leaving they then offer to ‘match’ their competitor. At this point I’m already fed up with the extra work they’ve created for me so I want better than a matched deal. And yet, if they just had an inflationary increase each year, I’d save the time and effort of looking elsewhere and take the easy path of letting the policy renew automatically.

Selling commodities on price is (relatively) straight forward; save your best deals for your best clients. For services and higher value offerings it is as much about customer service as price.

Having taken great pains to ensure that we have the right clients on board it is a lot easier to look after them than to let them slip away while you’re busy courting newbies. Looking after your existing client base is much cheaper and easier than marketing to strangers.

– Set your service levels and then work on improving them

– Set fair price increases for all

– Consider giving a small treat to your loyal clients. This might be early access to a new service or just a simple thank you card.

Never forget that your clients CHOOSE to stay with you and they can also choose to leave.

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How to scale your small business

Scaling a business can only go so far by selling more of the same. Once you have reached capacity you will probably need to look at a new, scalable business model that requires less of you, the business owner. For instance, offering service one to many instead of one to one.

Hudson Business Advice offers courses and group coaching as well as individual coaching so that I can optimise my time and make our services affordable for more people. My books aim to offer this too and we have a range of ‘products’ at different price point but, more importantly, different levels of my (limited) time

To free up more time you can look at using technology. Not just AI but other software too. At Minerva Accountants we use Apron or Hubdoc to speed up bookkeeping. These apps incorporate optical character recognition, machine learning, and other AI technologies to suggest coding, so our bookkeeper spends less time typing data and more time reviewing. With up to date bookkeeping, we can offer our client better advice.

You may also need to start delegating more. Not just to free up my time but I like to find people better than me at specific tasks/roles. You can use written procedures and reviews to ensure that work is carried out to the highest standards.

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How to improve your profit margins

If your profits are lower than you’d like and you’re not taking home enough money to cover your bills, let alone to make up for all the hassle of running your own business, then you probably need to look at your margins. (If you’re happy with your profitability then save 2 mins reading) 

  1. Look at your prices and increase those where possible. I’ve blogged on this several times before and it is a key component in many of our courses or you can purchase our mini-course on the topic
  1. Reduce your costs by simplifying and documenting processes so that you can use more junior staff 
  1. Reduce your costs by using more automation (dare I mention AI or are you sick of hearing about that too?) 
  1. Reduce your costs by negotiating better terms with suppliers 
  1. Improve your efficiency to lower your costs 
  1. Focus on selling more of your high-margin products 

Even doing just one of these things will help to improve your business 

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How to create a budget for your business

How to create a budget for your business

Businesses and individuals with plans are more likely to achieve those results. But how do you go about it?

  1. Personal objectives – the objectives of owner managed businesses are often a subset of the owner’s personal objectives.
  2. Business objectives – what do you need from the business to meet your personal goals?
  3. What products/services do you have to sell?
  4. Who is your ideal customer?
  5. What do you know about your competition and how you can differentiate yourself from them?
  6. Sales plan – what and how much do you need to sell? Is this realistic?
  7. Investment plan – What investment do you need to make in staff, training, marketing, equipment, and technology
  8. Will this achieve the desired results?
  9. What actions do you need to take (and when) in order to stay on track to meet your goals?

You can do this on your own but, if you’d like more help, then we have a budget workbook and accompanying videos.

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Do you really believe your CSR?

Happy new year! 

Sustainability. Do you do anything about it or just talk about it? 

Current breakfast view is offices that have their lights on 24/7 (even over the Christmas shut down) when nobody is there. I’m far from perfect myself but this seems like an easy action. 

We moved into the centre of Bristol in time for Christmas. This enabled me to make some positive changes. 

I have sold my car! It’s a big lifestyle change and I’ll still need to hire a car sometimes (Enterprise run a car club where we can hire by the hour/mile). Public transport is far from perfect but I’ve always preferred to use it (or to walk/cycle) when possible. That’s now much easier in the city than it was in rural life.  

We also have incredibly fast broadband so, while I can walk/train/bus to more meetings in person, it is also easier to run online meetings. Since covid more people have a suitable set up for this and Minerva Accountants is run remotely (apart from our 90 day planning sessions which are usually in person). I like seeing people face to face but a Zoom/Teams call saves lots of travel time which also increase productivity. 

I know I’ve still a lot to improve as I do like to travel but I’m keen that we shouldn’t miss the easy things. Are there any simple improvements that you can make? 

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How to work faster 

Why do some people work faster than others? Sorry, I have no idea but I did hear of a study that discovered that manual work rates could double between slow and fast workers. The more complex the work, the higher the multiple so that a software engineer might be 16 times faster than a peer.  

When I set up my first accountancy business my plan assumed that everybody worked at the same pace as me. When I started recruiting (good) staff I found that this wasn’t the case and that I was a lot faster than others. I had to adjust my business model accordingly. We still keep approximate timesheets to track individuals’ work rates for planning purposes. 

So how can you help slower workers to speed up? 

  • Have proper processes so that everybody knows the most efficient way to do things 
  • Training and processes help people to get started sooner on each task with less planning time 
  • Help them to find the best time of day and working environment for them to do their ‘deep’ focused work and fit simpler tasks around this 
  • Build in controls and reviews so that faster work doesn’t become sloppy work 

When building your business cost model consider cheaper, slower trainees/junior staff vs more expensive but faster qualified/senior staff. When could you use different staff? 

Plan your work and your resource accordingly. Most of our accounts work is carried out by other members of the team and I only review it. This also means that all year end accounts have the benefit of at least two sets of eyes. BUT if a client needs something quickly, I often do it myself. The costs are passed on to the client if the extra speed is needed because they have delayed. 

Any other ideas on how to speed up work rates? 

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The benefits of a military life

No, this isn’t about conscription, it’s about moving around all the time and meeting strangers.

My father served in the army for 24 years so I had had 25 different homes by the time I left home aged 18. This itinerant life meant that, in spite of being a natural introvert, I have no problem walking into a room full of strangers and introducing myself.

It’s great practice for networking as a business owner.

  • Hold your head up and look people in the eye
  • Smile (as naturally as you can)
  • Practice a firm handshake (not a crushing vice but not a wet fish either)
  • Rehearse your first line
  • Have 3 questions prepared to start conversations

Focus on introducing people to each other then they can make the conversation while thinking how sociable/helpful you are.

Incidentally we offer 10% discount to military and their ‘dependent’ family or 15% to REME (as my Dad tells me they’re the best 😉)

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