How to effectively run a small business

How to effectively run a small business

We know you want your business to be successful. But, running a business isn’t always easy. Here are 7 steps to help run your business effectively, so you use your valuable time for the right tasks.

1. Price your goods or services right

Whether you’re selling a product or offering a service, setting the good price is important. It can be a tricky task, but getting it right is an important step. Pricing your goods effectively means you can cover your production costs and, if you fulfil your sales forecast, break even overall and make a profit.

If you’re not sure where to start, check out our guide to pricing your goods here.

2. Keep costs low

Along with setting the right price, keeping your costs low helps keep your business running. If your business is new, you don’t want to spend more than you need to. As you grow, you can keep this mindset and be effective about what you choose to spend your money on. When you’re careful about your costs, you’ll be able to make better decisions about what to invest in.

Start by budgeting, forecasting and analysing your expenses to see where you can save money. If you need some more tips, follow our guide to saving money in your business here.

3. Know when to grow

If you’re running a business alone, it’s tempting to try and do everything yourself. But, sometimes it’s more effective to outsource jobs to someone else.

For example, if you’re creating a website or branding your business and don’t have expertise in that area, instead of spending time on the process you could hire a professional. Or, if your business is growing, you may need to hire staff to help fulfil demand.

If you’re ready to grow your staff, you can check out our guide to hiring your first employee here.

4. Chase up late payments

Not getting paid on time is disruptive, but also stops your business from being effective. The best way to avoid late payments is to set your payment terms on your invoice, including interest on any cash that becomes overdue.

But, if you do get paid late, don’t be afraid to follow up. Sending a polite reminder including an invoice with your interest added will hopefully get you paid. It’s also important to track your invoices so you can see clearly when you need to chase a payment.

5. Prepare for tax

While tax is no business owner’s favourite thing, it is important to plan ahead! Set aside money to pay your taxes, and make sure you know which taxes could affect your business.

Don’t leave doing your accounting or preparing your tax return to the last minute. Instead, do your accounting regularly using an online accounting software like Bokio. If you’re working with an accountant you can invite them to work with you. You’ll have everything you need in one place to submit your return when the time comes, and won’t have to worry about looking for any receipts or invoices.

Want to know which taxes could affect your business? Read our guide to UK taxes and rates here.

6. Work on your management skills

Part of having an effective business is hiring the right people and managing them in the right way. Getting the most out of your employees will not only help your business grow, but can also help their personal development.

From measuring performance to having open communication, follow our 5 step guide to employee management here.

7. Manage your finances

Managing your finances with accounting will help you have a good overview of your business performance. By tracking your finances you’ll be able to make strategic decisions so you can run your business effectively.

With Bokio’s free accounting software, you have everything you need to do your bookkeeping, invoicing, and expenses all in the same place. Plus, there are automated reports so you can take control of your finances.

We have everything you need to help you prepare for your Self Assessment tax return, submit your VAT Return for Making Tax Digital and keep the right financial records.

Accounting is kept simple with Bokio, so you have more time to spend running your business.