Business data from the Office of National Statistics showed that a total of 100,835 businesses in the UK closed in the third quarter of 2021, a 50% increase from closures in the third quarter of 2020. To protect themselves against global crises and other unexpected events, businesses need to learn how to manage their finances wisely. That means staying on top of payments, organising cash flow, and optimising business expenses. So, with that in mind, the following tips can help small to medium enterprises manage their money.
Step 1: Monitor Income And Expenses
Every business should have a good handle on where its money goes. As we mentioned in ‘7 Ways to Cut Your Business Expenses’, keeping track of income and expenses helps you identify whether you are allocating your resources wisely. Understanding your expenses can help you figure out how to cut down later on.
Start by saving all receipts, both digital and physical. From there, find a place to store transactional data. Less tech-savvy businesses tend to use spreadsheets, but those that want to streamline the process can use cloud accounting software, such as Quickbooks, Freshbooks, and Xero. High-quality accounting software can integrate with your bank accounts to automatically import your transaction history into a comprehensive bank feed.
Step 2: Create A Budget
Once you’ve identified key spending areas, it’s time to make a smarter spending plan. Here’s where budgeting comes in. According to AskMoney’s guide to budgeting, the first step to building a business budget is to use historical income data to create accurate revenue forecasts. Once you’ve estimated how much you might make each month, figure out which expenses you can cut down to maximise profit.
Be sure to be realistic about reductions — if you resort to lower-quality services just to save, you might end up losing more money in the long run. For example, a restaurant that sources cheaper but lower quality appliances might have to spend more on replacements or repairs later down the line.
Step 3: Control Spending
Making a spending plan is one thing, sticking to it is another. Fortunately, many modern banking apps come with features that help you control spending according to your budget. The online bank Monzo, which won the award for Best British Bank in 2022, has a feature called Tax Pots. Monzo’s Tax Pots tool lets you divide income into dedicated expense categories — such as a pot for payroll, a pot for operating expenses, and a pot for taxes. By creating separate cash reserves and giving each a clear purpose, you can allocate revenue effectively and prevent overspending.
Step 4: Put Savings Back Into The Business
Once you’ve controlled your spending, it’s time to figure out what to do with all your extra cash. The smartest business move would be to invest in growth. Put your savings into things that can help your business make more money in the future. A delivery business, for example, can use savings to buy new delivery vehicles, which expands their capacity to take orders.
You can also use savings to diversify your business income. Place money into stocks, bonds, or other securities. This way, if unexpected events cause operations to slow down, the business has extra income to turn to.
At the end of the day, it’s important not to let poor money management prevent your business from reaching its full potential. Through expense tracking, budgeting, spending control, and investment, businesses can take their income further and make a bigger impact.
Besides the hospital bills, costs to repair damaged property, and the damages that you might have to pay if you’re found to be at fault, you also have to consider that these expenses will also significantly affect other areas of your finances. Your car insurance premiums are bound to increase, your injuries could prevent you from going back to work, and these sudden expenses could cause you to miss out on paying some bills and loans. After a car accident, financial recovery should be your top priority (along with your health). Here are some ways to maximise your recovery.
Consult A Car Accident Lawyer
The most effective way to recover most of your finances is to file a personal injury claim. Legal experts have the knowledge, training, internal knowledge, and connections to help clients secure due compensation. They can also advise you on how to handle liability waivers, witness accounts, and how to interact with the other party. While you can indeed proceed with a personal injury claim without a lawyer, doing so would mean that you forgo your biggest advantage in the courtroom, even if you’re sure that the other party's at fault.
Minimise Your Expenses
If you’re at fault and you’ve been made to pay damages, the best course of action is to reduce your expenses as best you can. This entails making significant lifestyle changes, but doing so will keep you from getting buried in debt, which is the last thing you need right now. Unsubscribe from any non-essential services that you use, and if your car was totalled, you may need to hold off from repairing it, and instead, commute, until you can financially recover.
Renegotiate Your Loans
If you have any running loans, it’s best to get in touch with your lenders and explain to them your situation. Most lenders are more than willing to negotiate the terms of your loan as they’d rather have small consistent payouts than missed payments from their clients. This way, your credit score won’t suffer from missing payments, and this will ensure that you still have loaning options open to you in the future.
Leverage Your Insurance As Best You Can
Your car insurance is extremely useful during times like this. They can cover a portion of your medical expenses, pay for car repairs, pay for the cost of a rental vehicle, pay for lost wages, and they can even cover damages you’ve caused to the other party. Your car insurance is extremely important, and the full value of its premiums will be felt only when you need it most. Car accidents are more of an eventuality than a possibility, and the best remedy to a financial problem is to prepare for it. You should always have emergency funds for situations like these. Even if your funds don’t cover the expenses completely, it would still be a big help to have a financial buffer.
The COVID-19 pandemic, which is still ongoing, will no doubt have a profound impact on the world's economy for several months at minimum. Additionally, 2020 is an election year in the US, an event whose outcome could also have a powerful effect on a whole host of financial situations, like the unemployment rate, inflation, gross domestic growth, and more. How can you take all these factors into account to create a realistic, accurate personal budget? For starters, it makes sense to build as detailed a budget as possible, make saving a habit, file tax returns as soon as possible, and take defensive investment positions to protect against what will likely be a volatile year for the stock market. Here are four realistic ways to get your financial life in order before 2021 arrives.
Set a Savings Percentage, Not an Amount
Consider selecting a one-digit number as your regular savings percentage each payday. Too many people focus on amounts, which can be misleading and lock you into an outsize amount when your paycheck size varies. Instead, decide to put aside 5%, for example, out of each cheque you receive and you'll be better able to stick with the plan for the long run.
Get Your Budget in Order
Know what lies ahead, especially if you plan to make any changes to your monthly expenses like purchasing a home, renting an apartment, buying a car, or taking out a student loan. The point of budgeting is not always to minimise expenses; it's simply to identify where money comes from and where it goes. After doing that, and only after doing it, will you be able to manipulate various elements of the income and outflow.
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Step one is to know what you have and what you spend each month. For example, an excellent way to plan for education borrowing is to use a student loan repayment calculator for estimating monthly payments. That way, there's no guesswork about what your obligation will be, and you'll be fully able to place the item student loan payment onto its proper line in the budget. Go through each of the ways you spend money and make sure there's an entry for each one. Many people fail at budgeting not because they spend too much but simply because they don't know how much they spend and lose track of their overall finances.
Get Your Tax Refund as Quickly as Possible
If you have money coming to you after you file your tax return, send the forms in via an e-file program as early as possible. That way, you could have the cash by February. If you plan to owe money to the government, wait until the official filing deadline, or a few days before, to file and pay.
Use Metals to Hedge for a Volatile Year
For numerous reasons, 2021 could be a roller-coaster year for the stock market. That's a good reason to purchase silver and gold as a hedge against market uncertainty and potential inflation. Be careful not to put your entire portfolio into metals, but only about 10%.
You need to protect yourself and your children, if you have any, during this process. A critical part of this is making sure your finances are protected as well.
The last thing you want to do is make a mistake that can cost you your home, savings, or retirement. Until your divorce is finalised, follow these three tips to keep your money safe. If you don’t, you may find paying for the next stage of your life to be a struggle.
Don’t Blow Your Budget
Now is not the time to reach into your joint checking account to splurge on a vacation, no matter how badly you need it. It’s okay to use your joint account for the usual expenses, but keep in mind every financial move you make is going to be under scrutiny. If a judge gets the impression you are trying to take more than your share, it could come back to haunt you later.
One big expense you’ll have that is out of the ordinary is a divorce lawyer. Your soon-to-be ex will have one, too. If your divorce is amicable, you may be able to come to an agreement about how much is fair for you to each take out of your accounts to use for this purpose.
If you are at each other’s throats and you can’t agree on anything, filing for a legal separation may be the best option. This would force you to come to an agreement about how you are allowed to use your money until your divorce is finalised.
It’s okay to use your joint account for the usual expenses, but keep in mind every financial move you make is going to be under scrutiny.
Know the Value of Your Assets
You and your ex need to evaluate and clarify your assets to make sure you know what they are and how much they are worth. This could include any of these types of property and investments:
- Your home
- Your bank accounts
- Any stocks or bonds
- Your pensions
- Your life insurance policies
- Any vacation homes
- The furnishings in your home
- The artwork you’ve collected
- Your appliances
- Your vehicles
- Any recreational vehicles
- Your boats
- Any small businesses you own
Once you’ve identified all of your assets, you’ll need to identify what belongs to you, what belongs to your ex, and what belongs to both of you. If you can’t agree how to divide the assets that belong to you both, this may be decided during mediation or negotiations in court.
Get an Attorney and a Financial Advisor
You may be considering skipping hiring an attorney because you are still on reasonably friendly terms and you believe you can handle negotiations yourselves. Divorce laws are complicated, and they differ from state to state, so it pays to follow the advice of specialist attorneys.
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An attorney can also make the divorce proceedings quicker and take some of the stress and burden off of you. You can let them handle the paperwork, negotiations, and anything else that is taking up so much of your time that you have no energy left for self-care.
A financial advisor is also critical during this time, especially if you aren’t very financially savvy or you have valuable assets. If your spouse has been handling most of the bills, you may not understand enough about your expenses to be sure you walk away with enough to start over.
Even if you and your ex agree on most things and you agree this is for the best, divorce can still be an emotional time. Having impartial professionals on your side who can speak in your best interest can make this process much easier for you both.
Many landlords require their tenants to have renter’s insurance policies and will request proof of them before you sign your lease. Not all of them will require it, however. If there’s one thing to take from this article, it should be that all renters should have a policy in case something happens.
Renter’s insurance does more than protect property: it offers protection for costly circumstances that you may not be able to foresee. Renter’s insurance should be part of any savvy renter’s game plan. Knowing what renter’s insurance policies cover can help anyone decide how much they need, even though there’s no-set-in stone answer. Everyone’s situation is different, so their need for this insurance is different too.
What Is Covered by Renter’s Insurance?
If you’re wondering, “How much renter’s insurance do I need?” you need to know why people need these policies in the first place. The main reason people opt for renter’s insurance is to protect their property. Personal belongings outside and inside your apartment are covered by renter’s insurance, but that’s not all.
In the event that you have to leave your rental home or apartment for a while, renter’s insurance policies also cover your living expenses while you’re staying in another place. These circumstances may not be foreseeable and could include an infestation, a fire, or other damage. Living expenses can become untenable in these situations without renter’s insurance.
How Much Renter’s Insurance Should You Get?
The first step to figuring out how much renter’s insurance you need is to calculate the value of your personal possessions and compare it to your budget. At that point, you can compare the quotes of several insurance companies to the value that you calculate in your personal property.
From a policy as low as the average renter’s insurance plans, which cost around $15 per month, you can get tens of thousands of dollars of personal liability coverage and property coverage.
The first step to figuring out how much renter’s insurance you need is to calculate the value of your personal possessions and compare it to your budget.
What Types of Coverage are there?
There are three types of coverage included in renter’s insurance policies. To what extent a policy includes each type determines its value. These coverage types include personal property, loss-of-use, and personal liability coverage. Ask yourself: how much of each type does a typical policy contain? This is important to know so you can spot plans that are expensive for their coverage amounts and those that are a true value.
The average renter’s insurance policy offers around $30,000 in personal property coverage, 40% of the personal property’s value in loss-of-use coverage, and $100,000 in personal liability coverage.
Deductibles are another important factor when choosing a policy. If you don’t already know, a deductible refers to the amount of damage you have to pay for yourself before an insurance policy kicks in. These exist in healthcare policies and it’s no different for renter’s insurance.
An average or acceptable deductible for these policies would be around $500. These policies are considered the best value for those that want renter’s insurance for coverage but aren’t necessarily worried about a specific accident. Those that want a lower deductible should expect to pay a much higher per month premium.
The disadvantage of cheaper policies is that the deductible is much higher, which is fine until you have to pay it. There’s also not much of a drop in the price per month for losing 50% or more of your coverage amount. A few dollars less a month will lower your coverage amounts considerably. This is why policies priced at or near the competitive average are often the most desirable.
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The Takeaway
Renter’s insurance policies involve three different types of coverage, including personal property coverage, personal liability coverage, and loss-of-use coverage. Knowing how much renter’s insurance you need depends on the value of your belongings compared to the needs of your situation.
Since the value of renter’s insurance policies decreases drastically with only a small reduction in the cost per month, average renter’s insurance policies are often the most desirable. Use this information to conduct more research into available companies to find the right renter’s insurance policy for you.
While it’s typical for the government to come after you for under-declaring your business income, you can bet it won’t give back money that should have been deducted from the corporate taxes you paid.
So, when paying corporate taxes to the IRS, you need to make sure you're calculating the right amount by keeping an eye out for these four tax credits:
1. Document expenses
Running a business requires managing a lot of paperwork. The good news is that the amount you pay to get documents printed can be deducted from your taxes. Acquiring or processing legal documents such as business plans and proposals is also tax-deductible. You might want to keep receipts for your document expenses and include the professional fees for attorneys or accountants tasked with preparing these documents. You will be surprised by how much you can save.
2. Cost of using vehicles
If you have a car you use to attend meetings with clients or transfer from one work location to another, your vehicle expenses are considered deductible. For this, you only need to measure the mileage the car has covered. There are apps that can help you measure your mileage so you have a better estimate of your deductibles. Take note that this is applicable only for business purposes, so personal travel should therefore be calculated as personal expenses.
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3. Research costs
Developing a new solution requires a lot of research and testing, which can drive up the cost of coming up with a new product. Luckily, you can offset these costs by using tax credits for research, especially if it is scientific. Under R&D credit rules, you can choose to deduct research costs immediately or amortize them. It is important to point out, however, that not all research activities are deductible. To be sure, you will need to refer to the IRS’s list of qualified research activities.
4. Miscellaneous fees
There are also other items you can write off. It’s this category that is the most neglected. You will have to be very detail-oriented in order to find these deductions, ranging from bank charges to payments in petty cash, from journal subscriptions to website maintenance expenses. It becomes manageable when you track your expenses closely using tools like tools like Hurdlr. The app can help you keep tabs on all your deductibles in real-time so you don’t have to waste time reviewing your expenses come tax season.
These are just some of the tax breaks you should look into if you want to save a lot of money. There are more than we’ve listed here, no doubt, so be sure that all your expenses are accounted for. You never know what routine expenses for your business can get you some money back on your tax return!
Owning and running a small business is no joke. You need to put in a lot of hard work, not to mention a huge amount of time toiling day in and day out in order for your venture to prosper.
Earning money is just one facet of this – you also have to be able to manage it properly. Quite often, a business can be working well, but because the funds are mismanaged, it may seem like you are losing money.
There are many ways to be wise about this. The main tenet is to keep cash on hand at a good level for your operations to continue working smoothly, and to keep your liabilities at the lowest possible level they could be. There are many ways you can practice this as you work in your business. Two key strategies prove especially relevant.
1. Keep Your Fixed Costs to a Minimum
The best way to decrease liabilities is to be prudent with your spending. Keeping your fixed costs as low as possible can help with this. One example of a fixed cost is your rent. Some aspects to consider for this line item are:
- The location of your office. If the size of the office doesn’t have to be too big, but accessibility is important for the daily transactions of the business, then it would be wise to choose a smaller space that’s centrally located.
- The size you need to operate. On the other hand, if the location isn’t really an issue, but the size is of greater importance, then you would usually choose the biggest land area you could afford that is farther from the central business districts. Examples of where this is more applicable are businesses that need warehouses or big facilities to house equipment, machines, or vehicles.
Another fixed cost would be the equipment that you have to buy. If you’re into manufacturing, assess whether it’s more prudent to have your goods manufactured by a third party, or if you are saving more in the long run by buying your own machines. Keep in mind that these assets involve a big amount of cash outlay and that you will have to pay for maintenance as time goes by.
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2. Keep the Cash Flow Steady
A business accrues a lot of operational costs – one example is that you need a steady amount of cash to pay your suppliers in order for you to keep your offerings available. However, your cash may be locked in assets that you purchased, or in your payroll budget, or in receivables from your clients.
One thing you can do in order to keep cash flow steady, instead of taking on a bank loan which accrues interest and consequently increases expenses for you, is to sell the receivables that you already have to financing companies. For example, if you are in the trucking business, you can enroll in freight factoring, where you let a factoring company buy your account's receivables so you get cash for them immediately. No need to wait for the 30- to 90-day period you initially have on contract with your clients before you get the cash you need to continue operating.
These are two of the main strategies to keep in mind in order to manage your finances more wisely. As long as you have these principles in mind as you make your decisions, you should find yourself secure, and your business in a pretty healthy financial state.
Managing a household budget is not always easy. Some months, there may not be enough money coming in to meet all of your needs. In other circumstances, you may have big plans or big projects on your mind that will require more funds than you currently have access to. In these cases, knowing where to find the financing you need is important.
Personal loans are a great choice for accessing extra funds in a completely straightforward way. Depending on your ability to take on new debt or your current plans and needs, a personal loan may be just what you need to move forward. If you want to make an informed decision about whether this kind of financing is right for you, then it can be helpful to know how personal loans are commonly used.
Let’s look at five specific reasons why you need to consider a personal loan.
1. Home Renovations
Home renovations are a great way to use the funds from a personal loan. Usually, home renovation projects can rapidly spiral over budget and quickly overwhelm the ability of homeowners to pay for everything. To see your projects through to fruition, and to avoid leaving your property in a half-completed state, then it is prudent to apply for a personal loan. Best of all, home renovations can actually add value to your home which makes a personal loan even more affordable in the long run.
2. Debt Consolidation
Personal loans can be a great way to consolidate your outstanding debts. If you are having a hard time keeping track of your debts and cannot manage to pay back numerous loans to numerous lenders, then simply the situation. Pay back all of your outstanding debts with a large personal loan. This way, you will only have one loan to worry about, and usually at a much more reasonable interest rate.
3. Emergency Medical Expenses
Sometimes, life throws us into situations that we did not expect. Whether your health has suddenly declined or the health of someone in your household is threatened, then the bills can add up quickly. Since health is far more important than anything else, it is worthwhile to take out a personal loan to finance your medical bills.
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4. Boost Credit Score
If you have big plans in your future such as securing a mortgage to buy a home, then you will need a good credit score. If your credit has suffered in the past, however, you will need to improve it first. Taking out a personal loan and then diligently repaying it allows your credit score to rise and will leave you with more options for credit in the future.
5. Travel
It is not generally advisable to use personal loans for discretionary spending. Purchases that are not truly needed are better afforded through diligent saving rather than relying on credit. This is because the interest payments you will make on a personal loan make the overall cost of this spending more expensive.
However, in some cases, discretionary spending on credit can be justified. Indeed, the choice is a personal one. For example, if you are offered a once-in-a-lifetime opportunity to take a dream holiday, then a personal loan can be useful. Nevertheless, be sure to weigh the pros and cons carefully.
Find Financing With Personal Loans
Beyond the five reasons outlined here, there are many more reasonable uses for the funds you can receive from a personal loan. If you have projects or expenses that you need to cover quickly, then find a reputable personal loan provider and start the process of securing this funding right away.
People who frequently travel to various places around the world aren’t necessarily rich; they just know how to save for their trips and cut unnecessary costs. If you can do the same, you will certainly be able to travel wherever you want with minimal cost. Visiting a new place can be so exciting, and you may start spending on unnecessary things.
To avoid that, you will have to stick to your plan, and only do the things that you planned for before traveling. That way, you will be able to cut unnecessary expenses and enjoy the trip as much as you want.
Have a Plan
Once you decide to travel, you will need a good saving plan. The first step in planning is being honest with yourself and matching your trip to your financial situation. That way, you will know if your plan is unrealistic and needs more work. You should know an estimation of your trips' overall cost, so you can understand how much you need to save and identify the expenses that you can cut during your trip.
Book Early
Flight prices change drastically, from one day to the next. Being able to book your flight early gives you the added benefit of finding cheaper fares. Do your research, and look for the right flight for you. Usually, non-direct flights are cheaper than direct ones, so bring a book along for those hours in transit. You’ll be smiling at the cost saved.
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Leaving Your Car Behind
While planning for your trip, you will realize some small costs that end up adding to the total expense, such as taking a taxi from and to the airport. If you’re taking your car to the airport, do your research. There are many airport parking options that you can benefit from. If you’re in Florida, Parking at Fort Lauderdale airport can be more affordable than requesting a ride, and you can be sure your car will be safe while you're traveling.
Opt for Private Accommodations
It is no secret that services like AirBnb have made things a lot easier for the frequent traveler. If you think about it, the cost of staying at a hotel, even with its benefits, might not really be worth it. After all, you’re a tourist, and how much time are you really going to spend in the hotel? More often than not, you’ll be walking around all day, and all you really need is a place to lay your head at night.
Once you set your goals and cut all the unnecessary costs before and while you're traveling, you will be able to travel more than once a year and enjoy the trip. Planning for the trip and knowing how much it’s going to cost is an essential factor when you’re looking to save money. So do the research, and with these nifty tips, you’ll be enjoying your trip to the fullest, even on a budget!
Yet, this is something many businesses, SMEs in particular, currently struggle with. Below David Duan, Data Science Stream Lead & Principal Data Scientist at Fraedom, explains why AI is key to the relationship between banks and business.
Research from Fraedom found that almost a third of UK SMEs claim to have a clear picture of business spend at the end of each month but little visibility on a day-to-day basis. As banks begin to remedy these issues, we are seeing the introduction of more technologies that make use of artificial intelligence (AI) and machine learning (ML). Consequently, businesses could soon benefit from a wider range of capabilities, tools and controls with AI having a major impact on the following areas:
Control over spend
Through the use of AI, banks will be able to more accurately forecast how much credit businesses require and limits on spending will be set automatically, enabling banks to gain a better understanding of their spending. This can also be implemented within the organisation as AI will allow for credit limit redistribution based on what different employees regularly spend. This means that credit will be allocated in an optimal way, ensuring the amount of credit employees are given reflects their spend history. This ensures that those employees who often make large transactions are given the credit to do so, while those who use their company accounts for lower-cost transactions don’t receive as much, so as to ensure credit is being used to the greatest effect.
Account protections
As banks make better use of AI for fraud detection, businesses will benefit from improved security features. In these scenarios, AI will help businesses keep their accounts safe by detecting any anomalies in their accounts and fraudulent activities much quicker than previously possible. This works by the model having an understanding of what is ‘normal’ for each account or card and recognising patterns based on past transactions and behaviours. For example, if 99% of the transactions for one account happen Monday to Friday, a transaction that occurs at the weekend will be seen as abnormal and flagged as such. Of course, anomalous transactions aren’t always fraud. Often they’re just out of the ordinary, requiring some more investigation – flagging them to the business would certainly allow for this. With companies currently losing an average of 7% of their annual expenditure to fraud, these technologies will help lower incidences of fraud as shown by Visa’s use of AI reducing global fraud rates to less than 0.1%. In the future, AI could be used to detect fraud in real-time, stopping fraudulent transactions from being processed altogether.
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Expense management
In addition to providing banks with a greater degree of control and understanding of their finances, banks are also beginning to use AI to offer businesses extra tools and services. A prime example of this is expense management systems which use AI to simplify the expense process and reduce the amount of time employees and finance departments spend on such tasks. As with fraud detection, the system would establish patterns based on the employees historic spending behaviour. For example, it may pick up that once a week the sum of £5 is spent in a coffee shop which the user then applies a particular expense code to. Once this behaviour has been demonstrated enough times, it becomes a pattern. So, the user will no longer have to code the transaction themselves, the system would automatically identify the type of expense it is and code it correctly.
As the system establishes more patterns and understands what the user or business is doing, smart coding could start to be applied to a greater number of transactions. This would significantly reduce the amount of time spent manually sorting through and coding expenses as the employee then only has to check that the correct codes have been applied.
Ultimately, the use of AI and ML will help banks build up a more accurate picture of their business customers and result in the ability to automate more processes. In turn, this will provide organisations with a greater level of control over their accounts, improved visibility and a better understanding of their finances. As this is realised, businesses will begin to reap the rewards of their employees spending less time manually interrogating accounts and instead being able to focus on more value-adding tasks.
If you want to enjoy a healthy annual profit margin and long-term success in your industry, you must take control of your cashflow. Here are four financial management mistakes your business must avoid.
1. No Emergency Fund
An emergency fund could help to keep your business afloat during a difficult time in your industry or when you received an unexpected bill. To ensure your company is never faced with financial hardship, aim to save a minimum of three months’ worth of corporate expenses, which could ensure your company’s survival should an issue arise.
2. Unnecessary Business Expenses
Many business owners believe they need to make large expenses to separate their brand from their rivals. As a result, they might pay a significant sum for the latest technologies, office equipment, or staff salaries.
It is, however, a smarter approach to adopt a more frugal mindset. For example, invest in second-hand products, haggle with suppliers, and find an affordable lease for your office or building space.
Never spend a penny more than you need to, even when your company is generating a superb return on its investment. By running a lean business, you’ll have more money available to overcome a financial obstacle.
3. Avoiding Insurance
The right insurance policy could help your business to make a swift recovery following onsite damage or compensation claims. Yet, many companies make the mistake of not choosing the right coverage to suit their specific needs.
There a wide range of options to suit different companies’ needs, such as business insurance, cyber and data risk insurance, and employers’ liability insurance. It is, therefore, important to consider the potential risks your organisation might face and to find an insurance policy to match.
If you fail to invest in the right insurance policy, your business could be liable for a considerable amount of money, should a client make a claim against you. For example, if you regularly provide professional advice and services to clients, you should learn more about professional indemnity insurance as well as public liability insurance. Reputable providers such as Hiscox can instantly provide coverage of up to £10 million with both professional indemnity insurance and public liability insurance so that your company aren’t caught out, with flexible policies tailored to your needs.
4. Failing to Budget
Many businesses are guilty of failing to budget each month, but it could be critical to your company’s success and survival. It ultimately helps a business owner to maintain a tight control of their finances, as they will know exactly how much money they will need to spend each month and where it is going.
Without a budget in place, you could fail to account for your tax obligations, insurance premiums, office expenses and more. If you spend too much, you may then need to apply for a business loan or run up debt on your credit card if you urgently need cash to pay for a debt repayment or corporate expense.
Of course, there's the deposit, mortgage payments and estate agents fees to think about, but what about finding out the boiler is broken once you move in? Or realising you need to pay just shy of £1,000 for a homebuyer's report? Once you add moving day costs, like hiring a van and buying sturdy cardboard boxes, it really does all add up.
So, before you get carried away putting in an offer on a home that could leave you out of pocket, here are five hidden costs first-time buyers should be aware of. And, if you want to find out exactly how much your new home could cost you, use Totally Money's new interactive home buying tool.
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Stamp duty land tax
Stamp duty isn’t a problem for everyone – homes under £125,000 won’t incur it, and prices up to £500,000 for first-time buyers will be reduced or negated. But if you’re buying a more expensive home, or not your first, it can cost tens of thousands of pounds.
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Fixing leaks, cracks and rewiring electrics
Small faults with a property are easy to overlook when you’re buying it. But once you’re in, it’s natural to want to get the place just right – but with average costs of £180 for fixing leaks and cracks, and as much as £2,750 for rewiring electrics, it can be a real shock.
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Homebuyer's report
Even if you don’t want a full building survey, a homebuyer’s report can identify a lot of potential issues with a property – but it’ll still put you out a massive £786 on average.
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Solicitor costs
When buying your home with the help of a solicitor, their costs can be between £850 - £1,500, which is a sizeable fee to pay as you enter your new property.
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Moving day costs
Boxes, a removals company to help you pack up and shift your stuff, taking a day off work unpaid to wait for the broadband to be installed, moving day costs can often the most hidden of all. Plan ahead by asking family and friends to help you move, or buying boxes in bulk, and you could save yourself a small fortune.
Joe Gardiner, TotallyMoney’s Head of Brand and Communications, comments: “Buying your first home is an exciting step in your life, but it’s also an expensive one – and often more expensive than you initially estimate. We conducted this research to help first-time buyers make sure they are aware of all potential costs before they have to pay them.”
(Source: TotallyMoney)
