MD, Sean, speaks to the Business Game Changer on ‘how to financially protect yourself for an uncertain future’.
Read Sean’s article on ‘how to financially protect yourself for an uncertain future’ here.
Sean Toomer is the owner, founder and MD of Diverso Accountants, a unique innovative company working exclusively with small businesses and start-ups. Diverso provides not only accounting, but an extensive package of free business support and advice all included in a monthly subscription fee – really helping SMEs manage cash-flow. As Sean says, he isn’t looking to change the world, just looking to change it for small businesses.
He’s an accountant, but different.
Well, here we are, another month on, and still battling through these crazy Covid times! Who would have thought that 2020 would turn out to be quite as strange, frustrating and downright scary as this? But, in spite of the challenges facing many businesses, it’s not all doom and gloom. Many people have seen lockdown, being furloughed, and even redundancy, as an opportunity to change their lives; to start their own business and chase their dreams. A recent survey by Direct Line reported that nearly half of young people want to become entrepreneurs and set up their own business; 1 in 5 Britons have either started a new business since lockdown or plan to start one by the beginning of 2021; and the Office of National Statistics states that 3 times the average number of start-ups were registered between April and June. The British entrepreneurial spirit is alive and kicking and that’s brilliant news!
I well remember the buzz, the adrenalin rush, the sheer excitement of starting my own company. I was 21 – and thought I knew it all! There’ve been many ups and downs along the way but now, in my 30s, I still wake up every morning with that same buzz, that same excitement for the day, that ‘Bring it on – let’s kick some ass’ feeling! So I thought I’d share some of what I’ve learned not only as an accountant but as a small business owner myself.
With many ‘limited companies’ falling through the loop in the government’s financial package to help businesses through this pandemic, you might be tempted to run your business on a self-employed basis. Don’t do it! There are many reasons why it’s better to operate as a Limited Company, two really important ones being you can legitimately pay less tax than as a sole trader; and you have Limited Liability Protection meaning you are not personally liable for any financial losses incurred by your business if things don’t quite go according to plan.
Whilst we’re talking about tax, one of the most frequent questions I’m asked by start-ups is ‘What can I claim?’. The short answer is that you can claim anything against tax that you are buying exclusively for your business. If you’re in retail, for instance, you can offset your stock but it can include costs like insurance, advertising, training, equipment, accountancy fees (obviously!), rent and loads more.
Of course, in the current climate when everyone is being encouraged to work from home, renting office space may not even be an option. If you’re running your business from home, there may be things that have joint personal and business use like your mobile phone, maybe a small percentage of your heating and lighting, that you can offset against tax. This is quite a complex area so it’s always wise to seek some professional advice – or just contact Diverso! If you are working from home and you’re spending hours at a desk in front of a screen, here’s a really important piece of advice: Buy a decent bloody chair! You can’t be doing with back pain when you have a business to run. It might be the best investment you make! (and you can probably claim for it…).
Take advantage of all the amazing technology packages that are out there specifically designed to support small businesses. I know this is something I bang on about … a lot!. Entrepreneurs are ‘doers’. They want to get on with making things happen, turning their vision into reality. Keeping track of the finances isn’t always their strong point. However, there is software that can revolutionise the way you run your business, taking the headache out of the sometimes-tedious daily administrative and financial tasks. At Diverso, we ourselves, and all our clients, use a software combination of Xero, Receipt Bank, and Fluidly which makes bookkeeping really easy. No more nasty financial surprises nor carrier bags full of receipts to sort through! This is all part of the subscription-fee service that we provide at Diverso. And now, we’ve just launched a new service – a really affordable £48.00 per month – specifically aimed at one-man-bands and side hustlers – it literally runs your bank account for you!
There’s no doubt that, we’re going through particularly challenging times, but you know what? If you wait for the ‘right’ time to start a business, it’ll never arrive. Do some research, get some professional advice, and contact Diverso. We’re always ready to help people get that ‘Bring it on – let’s kick some ass!’ feeling. Believe me, it’s a good one!
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