Here at Kirkwood Wilson, we know that times are tough and they are likely to remain challenging for many businesses. So what do businesses have to do to ensure that they succeed in the economic environment over the next two years?
On 17 November upon the release of the Autumn Statement, we will know more about the government’s spending plans and taxation policies. The prospect is one in which the economy will be less dependent on the government, with spending to be cut aggressively and taxes to rise across the board.
The changing nature of the economy presents a whole series of questions for any business:
- What finance will it need in the short term and to invest?
- What are the challenges of entering and maintaining export and/or new markets?
- How does it develop new and innovative income streams?
- How can it manage its workforce through the peaks and troughs of activity?
But what will a business have to do to remain successful? Many different businesses will have different requirements, but we are here to support you with an expert accounting team and specialist business advice.
Here are some business strategy examples that have succeeded:
<h2>What are the most successful businesses strategies?</h2>
A business that puts the customers first
For the next few years, companies need to understand their customers and be able to respond to their needs and the pressures they are facing. Household income has been squeezed and some experts predict it will continue to be the case until 2024.
For most consumer-facing businesses, that means offering value for your customers.
The key here is to invest time in understanding your customers’ spending patterns and their needs. Take some time to research these needs and look at how you currently satisfy them and what you could do to improve your offering.
Think of ways you can change the delivery of your product or service. Simple things like:
- Discussing your offering with the customer before providing it.
- Letting the customer know how things are progressing,
- Calling the customer to make sure everything went okay after delivery are small ways you can identify what the customer wants and needs.
- Constant communication with your customers before, during and after the sale is a key factor for successful business in tough times.
- Ask yourself what you could do to improve this in your business.
- Take time to seek out new revenue streams.
- Consider rebranding some of your offerings and selling abroad or online.
- What new income streams are available to you and how can you take advantage of them?
A business that is able to control costs
Keeping the cash coming in is fundamental, but so is controlling the rate at which the cash flows out.
Take time to think about:
- Your costs and what you could do to improve the way you manage your business.
- Regular review of targets to actual costs is key to good control of your business.
- Look at the way you do things and are there alternatives?
- Consider alternative suppliers, alternative payment schedules, and better use of electronic point of sale, stock management and quality control.
Sit down with us to discuss your strategy for controlling costs, brainstorm how you can do things more quickly and efficiently, and formulate a strategy for the next year. Learn more about our packages.
A business that can manage employees
One of the biggest costs for firms is the cost of employment. Taking on new staff is expensive, equivalent to fresh investment in the business. Many successful businesses are reviewing the value they get from their employees and are taking time to discuss how they can be more customer focused and efficient in their roles.
Look at alternatives to salary rises, such as the use of performance-related pay and a bonus structure that rewards both good services to customers and increases in sales. Get all employees involved in how the business can improve and do this regularly.
What is the best business success strategy?
Unfortunately, there is no one size fits all approach when it comes to a successful business strategy. Here at Kirkwood Wilson we know there are a multitude of ways that can contribute to your success and bottom line. Our biggest advice is to be flexible, but also be alert to the dangers.
Successful businesses of the future will be fast on their feet but also aware of the risks. They will be lean and efficient whilst being able to spot and take advantage of the opportunities that are there. As tough as the economic outlook appears for the coming years, there will still be plenty of opportunities so please talk to us about your plans – we have considerable experience in helping our clients be successful!
We can’t quite believe we’re talking about another tax year already, but Rishi Sunak has delivered his Spring Budget Update.
There wasn’t quite as many updates as we would have ordinarily expected, but we’ve done our best to summarise the main points for you below.
There will be an increase to the tax-free personal allowance to £12,570 for the 21/22 tax year. There will also be an increase to the point at which you begin paying higher rate tax; this will move to £50,270. The additional rate band will remain frozen at £150,000.
These thresholds will remain in place until the end of the 2025/26 tax year.
There will be an increase the threshold for class 1 contributions for employees and class 4 NICs for self-employed people to £9,568 in the 21/22 tax year.
Class 2 NICs for the self-employed will remain at £3.05 per week for 21/22 and the upper earnings limit and upper profits limit will increase to £50,270.
The capital gains tax annual exempt amount will remain in place at £12,300 until 25/26.
There will be no changes to the lifetime limit of £1m for qualifying gains for Business Asset Disposal Relief. The 10% tax rate on these qualifying gains remains the same.
Company van benefits for private use on a van will rise to £3,500. The company van fuel benefit charge will increase from to £669. The company car fuel benefit will rise to £24,600 (upon which the BIK % will be applied). All of these change will take place from 6 April 21.
Any losses arising from sole trade or partnership businesses may be carried back for 3 years (as opposed to the usual 1 year limit) for the 20/21 and 21/22 tax years.
Corporation Tax rates will increase from 1 April 2023. For companies where profits are less than £50,000, the rate will remain at 19%. Where profits range from £50,001 and £250,000, companies will pay the main rate (25%), however this will be reduced by a marginal relief which essentially creates a tapered Corporation Tax rate.
Corporation Tax losses, which occur in accounting periods ending in the period 1 April 2020 to 31 March 2022, can be carried back for 3 years (rather than the usual 1 year).
There will be a ‘super deduction’ for qualifying purchases of plant and machinery between 1 April 2021 and 31 March 2023. 130% first year allowances will apply to these main rate asset purchases. A 50% first year capital allowance will be available or qualifying special-rates assets.
The annual investment allowance will reduce to £200,000 from 1 January 2022. The rate of £1m will apply until then.
We hope the above gives you an idea of the changes that have taken place. If you have any queries, please let us know and our team will be happy to help. Send us a message through our contact page or email us email@example.com
George Osborne has delivered his eighth Budget and sparked controversy by warning of the risks to the UK economy of EU exit. He said the UK was “well placed” to handle a “dangerous cocktail” of global economic risks if “we act now so we don’t have to pay later”. Labour have said it is a budget with “unfairness at its very core”. What do you think? Here’s some of the key points from the Spring Budget.
The big headline from Chancellor George Osbourne’s first full Tory budget since 1996was a radical move to introduce a compulsory “living wage”, entitling over 25s to earn £7.20 an hour, rising to £9 by 2020. Kirkwood Wilson Accountants assesses the other marquee measures likely to affect small to medium businesses.
George Osborne made his sixth and final Budget announcement before the general election yesterday. Kirkwood Wilson Accountants give you a succinct summary of all the key details likely to affect you and your business.