How do you know if you are making enough profit? How can you ensure that you won’t end up being a busy fool?

In my experience, most small businesses struggle to price their Goods and Services properly. One of my clients was really struggling with this. He had an excellent product. His customer service was faultless. His deliveries were always on time. But he had very little to show for it. And to add insult to injury, most of his clients didn’t pay him on time. Does this sound familiar to you? For one year, I sat down with him and urged him to review his pricing. I pointed out that, if he carried on like this, his business would go under. And it did. It went into liquidation a few weeks ago. It need not have happened.

One of the main reasons that small businesses fail to make enough profit is that they don’t know what their true costs are. They invariably charge what the client is willing to pay or what everyone else seems to be charging. This is a recipe for disaster. Unless you know what your true costs are (including your overheads), you will invariably get it wrong. In the worst case, it can cost you your business. If you are lucky it will simply add more stress to your life.

So how much money should you be making? As a rule of thumb, a small business with a turnover of say £250,000 and two full-time Owner-Managers should end up with a Net Profit Margin of at least 25-30%. Obviously, it might take a few years to build up the business. It won’t be easy. Running a business is not for the faint-hearted. But after a few years, it needs to deliver some results. Otherwise you might as well work for someone else and enjoy the benefits of employment: paid holidays, a regular paycheque and employment protection.

Why are Management Accounts so important? Because they tell you, on a regular basis (ideally monthly) what your actual profit is. And they will also tell you how much profit you make on each of your clients. They act as an early warning system if you are not making an adequate return. They also help you understand where your costs are and what you need to do to improve your margins. They will transform your business. And give you peace of mind. Pop in for a coffee and I’ll show you what a difference this simple (and cost effective) solution will do to your business.

Three years ago, the UK economy faced the most serious recession since the 1930’s. We were heading into the perfect storm and few of us will forget the worry and stress as we watched the daily news. I remember those early months in 2009 so well. And I lost count how many clients came for advice, support or just a shoulder to cry on. For those who had never experienced a proper recession, this was scary stuff.

But somehow, we muddled through. We Brits are good at that. The world wasn’t going to end and life went on. We thought it was all over. But it had barely begun. We are experiencing the most prolonged drought in mortgages and loans ever witnessed in the past 50 years. Perfectly healthy businesses are failing. Profitable businesses are failing. Long established businesses are failing. Why? They are not managing their cash and the banks are not lending. And it is unlikely to get better anytime soon.

How can you avoid falling into this trap? You absolutely must master the technique of Cash-Flow Management. It is simple. Common Sense. Easy to understand and easy to implement. But you ignore it at your peril.

We have helped scores of clients , preventing them from losing everything they have worked for, by implementing a simple Cash-Flow Forecast. It is THE most important tool and you can no longer afford to ignore it. I guarantee that it will transform your business. And I will offer you help you implement it for FREE. That’s right. I will give you my time and my expertise, absolutely free, because I KNOW that you cannot face the future in business unless you understand the importance of managing your cash.

In this Brave New World, Cash is King. And Debt will kill you.

If you do nothing else, read this fantastic little book, which you can download on Amazon: “Cash Management” by Tony Dalton – read it and re-read it and make sure you implement it.

One of the first questions I usually ask a new client when I first meet up with them is this: When do you plan to sell your business?

The response varies from mild surprise to being totally perplexed. They have just come to see me to discuss their new business and wanted to discuss our Accounting Services. But there is a reason why I ask this question. Unless you have a definite, clear goal, you will never know when you have arrived at our destination. To start a business without knowing where you want to be in 10 years time is a bit like going to the airport and boarding a plane but without knowing where you will land. How long will you be travelling for? How much will the journey cost? Who will travel with you? What do you expect to see when you arrive? What do you know about your destination?

You have been dreaming of running your business for years. You can’t wait to experience the sense of freedom and creativity without being bogged down with politics and indecision. And then you finally decide to take the plunge. And in no time at all, you are bogged down by the day to day challenge of running your own business. There are new clients to find, bills to be paid, new staff to be trained and motivated, clients who haven’t paid their bills – and the thought of selling your business for a profit seems ridiculous to put it mildly.

The purpose for assisting new clients with their exit strategy is to help them understand that they should be creating an asset. Most of us usually know how much our home is worth. And some of us even know the value of our savings and pensions. But very few small business owners have ever sat down and tried to figure out how much their business is worth. And fewer still have any idea how to sell their business or increase its value.

Artema is an innovative local Accounting Firm, serving the Bournemouth Business Community and we specialise in helping owners of small businesses develop their full potential. We know how difficult it is to try and figure out how to build a business that could be sold in ten years for £250,000 or £500,000 or even £1,000,000. The day to day challenges seem overwhelming at times. And your main priority is to get the business off the ground and make a profit so you can keep the roof over your head. But we also know from helping hundreds of clients to work on their business as well as in their business, that unless you begin with the end in mind, you will be like a ship that sets sail without a destination.

Let us show you how you can reach your full business potential. Find out what you absolutely MUST do to avoid retiring from self-employment with nothing more than memories, an old desk and unfulfilled dreams. Contact us to speak to one of our Business Advisors. Our Service is practical and based on what works, not business theory. We know what works and what doesn’t. We know we can make a difference to your business and all we ask is that you spare us a couple of hours for a FREE consultation. We are not here to sell you anything. We are in business to help small and medium sized enterprises to reach their full potential – not to sell expensive consulting services that only benefit the consultant.

Please click here [ ] for your FREE report on the eight key steps to increase the value of your business.
Every week, hundreds of small businesses are sold for a handsome profit, providing the owners with the funds to enjoy a happy retirement. It is not as far-fetched as you think.