Benchmarking financial results involves comparing a business’s financial performance against industry standards or competitors. This process offers numerous benefits, helping businesses identify strengths, weaknesses, and opportunities for improvement.

Firstly, benchmarking provides a clear understanding of a company’s position in the market. By comparing key financial metrics such as profit margins, costs, and revenue growth with peers, businesses can identify performance gaps and areas needing attention.

Secondly, it aids strategic planning. With insights from benchmarking, businesses can set realistic targets and develop informed strategies to enhance profitability and efficiency. For example, if a competitor achieves higher profitability through lower overheads, a business might explore cost-reduction strategies.

Moreover, benchmarking promotes continuous improvement. Regular comparisons highlight trends and potential risks, enabling proactive decision-making. It fosters a culture of learning, as businesses adopt best practices from industry leaders.

Lastly, benchmarking can enhance investor confidence. Demonstrating performance in line with or better than industry standards reassures stakeholders of a business’s stability and growth potential.

Overall, benchmarking financial results is a powerful tool for driving competitiveness, efficiency, and long-term success in today’s dynamic business environment.

Before extending credit to new customers, it’s essential to assess their financial reliability. Checking their creditworthiness helps protect your business from potential losses and late payments. Here’s how to do it:

• Start by requesting basic financial information from the customer, including company details, trading history, and references from suppliers. Established businesses should be able to provide trade references that confirm their payment behaviour.
• Conduct a credit check using a business credit reference agency such as Experian, Equifax, or Credit safe. These agencies provide credit scores and reports on a company’s financial health, outstanding debts, and payment history. For individual customers, you may need their consent to run a personal credit check.
• Review the customer’s filed accounts at Companies House if they are a UK-registered business. Financial statements, including balance sheets and profit and loss accounts, offer insight into their financial stability. A company with poor liquidity or persistent losses may pose a credit risk.
• Check for County Court Judgments (CCJs) or insolvency records. If a business or individual has a history of unpaid debts or legal action, this could indicate a higher risk of non-payment.
• Set appropriate credit limits and payment terms based on the information gathered. If necessary, request upfront payments or guarantees to minimise risks.

Finally, monitor ongoing customer creditworthiness. Even reliable customers can experience financial difficulties, so it’s important to review accounts periodically and adjust credit terms when necessary.

Cash flow is the backbone of any small business, yet late payments continue to be a major challenge for entrepreneurs across the UK. According to the Federation of Small Businesses (FSB), around 50,000 businesses close annually due to cash flow problems caused by overdue invoices. To help combat this issue, the UK government has set up the Small Business Commissioner (SBC) to support businesses in tackling late payment disputes and improving payment practices.

Why Late Payments Are a Problem

Late payments can cause severe disruptions to business operations, affecting your ability to pay employees, invest in growth, and maintain supplier relationships. Delays in receiving funds can lead to increased borrowing, higher interest payments, and unnecessary stress for business owners. Worse still, chasing unpaid invoices can be time-consuming and frustrating.

How the Small Business Commissioner Can Help

The SBC is an independent public body that provides free support and advice to small businesses dealing with late payment issues. Services include:

• Advisory Services – Guidance on how to prevent and manage late payments.
• Complaint Resolution – Assisting small businesses in resolving disputes with larger firms over unpaid invoices.
• Webinars and Educational Resources – Free workshops, webinars, and guidance on improving payment practices.

Practical Steps to Avoid Late Payments

To protect your business from cash flow disruptions caused by late payments, consider these strategies:

1. Set Clear Payment Terms – Ensure that all contracts specify payment deadlines, late payment penalties, and accepted payment methods.
2. Invoice Promptly – Send invoices as soon as work is completed, or goods are delivered and follow up promptly.
3. Use Digital Invoicing and Payment Tracking – Tools like QuickBooks, Xero, or Sage can automate reminders and track payments efficiently.
4. Charge Late Payment Interest – Under the Late Payment of Commercial Debts Act, businesses can charge interest on overdue payments.
5. Seek Mediation or Legal Action – If payment disputes escalate, consider mediation through the SBC or taking legal action.

By implementing proactive measures and utilising available support, small businesses can reduce the impact of late payments and maintain a stable financial position.

Expanding into international markets can be a game-changer for UK small businesses, opening up new revenue streams and increasing business resilience. With the right knowledge and support, even small firms can successfully sell their products and services abroad. The UK government offers various resources to help businesses navigate the complexities of exporting.

Why Exporting Matters for Small Businesses

Exporting allows businesses to diversify their customer base, reduce dependency on the domestic market, and increase profitability. The UK has strong trade links with Europe, the United States, and emerging economies, providing numerous opportunities for businesses to grow.

However, international trade comes with challenges, including understanding customs regulations, dealing with fluctuating exchange rates, and adapting products to different markets. That’s where government support comes in.

Government Support for Exporting

The Department for Business and Trade (DBT) provides extensive resources to help small businesses start or expand their export operations, including:

• Export Academy – A free training programme designed to help businesses understand the basics of international trade.
• UK Export Finance (UKEF) – Provides financial support such as export insurance, loans, and guarantees to protect against non-payment risks.
• Market Research and Guidance – Access to information on demand for products in different countries, cultural considerations, and regulatory requirements.

Steps to Start Exporting

1. Identify Your Target Markets – Research countries where there is demand for your product or service.
2. Understand Customs and Compliance – Each country has its own regulations for imports, and businesses must comply with local laws.
3. Consider Logistics and Shipping – Work with freight forwarders or couriers who specialise in international shipping.
4. Adapt to Local Preferences – Modifying packaging, pricing, or marketing strategies to suit the target audience can enhance success.
5. Use Trade Shows and Networking – Attending international trade fairs can help you connect with potential buyers and distributors.

With the right support and careful planning, small businesses can leverage international markets to achieve long-term success.

Making a significant investment in new equipment can be a transformative step for a business, improving efficiency, productivity, and competitiveness. However, such a decision requires careful planning and analysis to ensure the investment aligns with the business's long-term goals.

1. Cost and Financing

The upfront cost of new equipment can be substantial, so businesses must assess their budgetary constraints. Consider whether the purchase will be financed through cash reserves, loans, or leasing arrangements. Compare interest rates and tax implications of each option and ensure the business can comfortably manage the repayment terms if borrowing is required.

2. Return on Investment (ROI)

Evaluate how the new equipment will impact productivity and profitability. Will it enable cost savings through greater efficiency, reduce downtime, or enhance product quality? A detailed ROI analysis should include all associated costs, such as installation, training, and maintenance.

3. Suitability and Scalability

The equipment must meet current operational needs and be flexible enough to adapt to future requirements. Consider whether the investment aligns with projected business growth and whether it can integrate with existing systems and processes.

4. Technology and Innovation

With technology evolving rapidly, it's important to choose equipment that won’t quickly become obsolete. Assess whether the purchase includes future-proof features, software updates, or warranties that extend its useful life.

5. Compliance and Environmental Impact

Ensure the equipment complies with industry regulations and health and safety standards. Additionally, businesses should evaluate its environmental impact, as eco-friendly investments can lead to cost savings and improve corporate responsibility.

6. Training and Maintenance

Factor in the time and resources needed to train staff to use the equipment effectively. Ongoing maintenance and repair costs should also be included in the financial analysis.

By thoroughly considering these factors, businesses can make informed decisions that maximise the benefits of their investment while minimising risks.

Persistence in following up leads is a crucial trait in many fields, especially in sales and practice business development. It involves consistently pursuing potential opportunities, contacts, or information, even when initial efforts do not yield immediate results.

Here’s why persistence is important and how it can be effectively practiced:

Importance of Persistence:

1. Maximizing Opportunities: Not all leads will convert immediately. Persistence increases the likelihood of turning a lead into a successful opportunity by maintaining communication and demonstrating commitment.
2. Building Relationships: Consistent follow-up helps to build trust and establish a relationship with the lead. This is essential when converting your prospects into new client instructions.
3. Standing Out: In competitive environments, the most persistent individuals often stand out from the crowd. Persistence shows dedication and can differentiate you from competitors who give up after the first attempt.
4. Overcoming Obstacles: Initial resistance or rejection is common. Persistence allows you to overcome these barriers, often leading to eventual success.
5. Continuous Learning: Through persistent follow-up, you gather more information, refine your approach, and adapt to the needs of the lead, which improves your overall effectiveness.

How to Be Persistent in Following Up Leads:

1. Set a Follow-Up Schedule: Create a timeline for following up with leads. This might involve setting reminders to check in after a certain period, ensuring that no lead is neglected.
2. Automation: Many of these follow-up processes can be automated using email marketing techniques

The key is to see that it is a series of planned follow ups that is your best option to increase conversions. Do not give up if success does not come early.

Companies developing artificial intelligence (AI) to improve safety on construction sites, reduce time spent repairing the railways and cut emissions across supply chains are amongst a number of projects set to receive a share of £32 million in UK Government funding.

Announced 7 August 2024, almost 100 ground-breaking projects have been awarded financial backing as the government continues its mission to boost productivity and kickstart growth across the economy through AI, so everyone is better off.

A total of 98 projects from Southampton to Birmingham and Northern Ireland will receive funding, involving more than 200 businesses and research organisations spanning a range of sectors including public services, driving efficiencies and reducing administrative tasks.

As part of the government’s mission to build an NHS which is fit for the future, pharmacies that deliver prescriptions across the country are also set to benefit from this new financial support. A project led by Nottingham-based Anteam will see them collaborating with retailers and the NHS to improve the efficiency of their deliveries using AI algorithms. This technology will match the delivery needs of retailers and hospitals to existing delivery journeys, unlocking under-utilised capacity, cutting carbon emissions and delivering a better experience for patients.

If you receive documents from overseas customers or suppliers and you need to translate text into English, have you used Google Translate?

It’s a free, but incredibly powerful facility.

You can select to translate:

• Individual blocks of text that you add to view in alternate languages.
• Images with text.
• Documents.
• And really useful, websites. Use this to view overseas sites in English or an English site in a non-English language.

Especially useful if you need to translate contracts to ensure you fully understand terms and conditions.

And if you are courting an overseas customer use this facility to generate your website into a local language and then send the translated link to your customer. Alternatively, add links to your website so casual overseas visitors can see your site in a local language.

But beware, before taking commercial decisions based on Google Translate translations, best to have the translated copy proof-read by a local advisor to make sure there are no ambiguities. Similarly, have a translated websites read by a fluent person to reveal any errors in translation.

Google’s own reply to the question – ‘Is Google Translate reliable?’ is:

Since its inception in 2006, it has become one of the top-rated machine translation (MT) tools, currently supporting 133 languages, having added 24 in 2022. Accuracy varies depending on language pair and content type, though some reports show Google Translate reaching 94% accuracy.

It is pretty much universally accepted that shareholders (usually directors) of small companies take out their remuneration as a small salary – a salary pitched high enough to secure NIC benefits but not high enough to that employee NIC contributions are payable – and any balance as dividends.

Unless directors have the need for remuneration in excess of the current basic rate Income Tax band (set at £50,270 for 2024-25) then salary plus dividends should be set at a level that does not exceed this limit.

But there are other ways that director/shareholders can extract profits from their company. They include:

• Interest can be paid to directors if they have credit balances on loans made to their companies. In some cases, this interest will be covered by the Personal Savings Allowance.
• If directors have loaned assets other than property to the company there may be an option to charge the company a rent for the use of these assets. Isolated rentals up to a maximum £1,000 a tax year should be free of any tax payment.

Directors can also choose to leave accumulated profits and cash balances inside their companies and build up these reserves as rainy day funds. Dividends can be taken from accumulated reserves (after corporation tax has been paid) even if the company has ceased trading.

If you would like to revisit your present strategy for extracting profits, or your longer term exit planning from your business, please call so we can consider your options.