Key business finance tips for 2024
2024 is set to be a year of challenges for the country and for its various industries
There are challenges that many businesses are ill-equipped to meet. In thinking about the new year, you might be thinking about your own business’ readiness for what comes next, particularly financially. What, then, are some key business finance tips you might incorporate into your 2024 plans?
The new year fast approaches, as the holiday season bears down on businesses and their staff to the tune of ‘Last Christmas’. While the new year means little for businesses legally speaking, there are nonetheless lessons that businesses can learn from the practice of creating New Year’s resolutions.
Budgeting
Budgeting is a core part of managing a business’ finances, regardless the stage of its life cycle it may be in. Indeed, a good budget is a practical necessity in order to experience any degree of success with regard to early-days funding, whether from banking institutions, angel investors or partners. Later on, a good budget can be the difference between positive and negative cashflow – and hence between the confidence of your investors and potential administration proceedings.
Revisiting your budget in and looking at business finance tips for 2024, you might think to look more closely at your business’ fixed costs. With the UK having teetered on the edge of recession for some months now, a period of downturn is easily-predicted in the coming year; reducing essential costs in the form of utilities and lease agreements early can help create a little more spare cash for the coffers.
Taxation
While less a cost and more a responsibility, taxation is a key consideration for any business. As businesses grow and infrastructures change, it can be easy to lose track of even basic finances – especially without a dedicated accountancy team. It can also be dangerous, where new product and service lines could create new tax implications (for example, in new regions or international territories). If your business is growing rapidly, it may be wise to consult a third party expert regarding your tax liabilities and the air-tightness of your internal accounting systems; a little investment here can save a lot in back-payments and punitive fines later on.
Managing debt
New businesses tend to start out in debt, with loans being the chief manner by which early investment in equipment, materials and produce is made. Even established businesses flirt with debt frequently, with the net worth of many famous entrepreneurs the result of careful debt management as opposed to raw cash holdings. With the potential for recession, though, debt burdens can be a one-way ticket to insolvency for smaller businesses.
Debt quickly becomes a pit into which expendable income is ‘invested’, creating negative cashflow and endangering your relationship with investors. A considered approach to your business’ debts, including their offsetting with new agreements, can be a powerful short-term salve (provided there is long-term structure to ensure the eventual repayment of all debt burdens altogether), and a great buoyancy aid for what could be a difficult year.