Your strategic plan for the business should aim to set a target for what your business will look like in 5 years time or when it is complete. This can cover profits, type of business, business size, value, products, market position, unique selling points, etc. It is your vision of what it will look like.

You do firstly have to decide if the business you are in or are looking at is capable of delivering what you are pursuing. If it’s not an opportunity worth pursuing, it doesn’t matter how much you plan it, it won’t deliver what you want.

Your business strategy should be based on your standards and values if it is to tie in with your life plan.

Without this plan of where you are aiming to get to, it makes it far harder to get there. By having goals, it makes it easier to determine if what you are doing is moving you towards that goal or not and you can plan to put everything in place to get there.

It enables you to identify the key challenges that need to be overcome if you are to reach your goal. Once you know the challenges, the cause and the real effect of not meeting them, you can identify the most fundamental challenges and then establish how to overcome them.

Here are the kind of things to consider in the strategic objective for your business of what your business will look like in 5 years time and when it is complete…

• What type of business will you have?
• What products and services do you offer?
• How large is the business with reference to turnover, gross profit, costs and net profit?
• What will the growth be over the period with regards to sales, new products, new markets, and number of employees?
• What will be your market position?
• What reporting systems will you use?
• How will your employees be trained?
• What geographic markets will you supply?
• What will be unique about the business and what will be your unique selling points with regards to distinctive products, marketing, operations and customer service.
• How much is your business worth now and on completion?

Research on goal setting has proven the following helps people achieve their goals…

• It’s better to set your goals high rather than low.
• Write down your goals. People who write down their goals are far more likely to reach them. There is a saying, “if you don’t write something down, it doesn’t exist”.
• You can keep refining you goals and reviewing them as you go along. Things do change.

• Goals should be SMART goals to achieve the best results.  This stands for:

1. Specific – how much, for whom, for what, etc
2. Measurable
3. Achievable
4. Relevant
5. Time framed – by when

For example, having a goal to get rich is not a smart goal. However a goal of “to have £100,000 in the bank in 5 years time” could be a smart goal. It’s far easier to put the specific steps in place to achieve this type of goal.

• Goals such as “to be the best at what you do” or “to love what you do” tend to lead to people being more successful than “to make lots of money” goals. The money does come but it is a result of having more meaningful goals in the first place

Now we know where we’re going, we have to get there…

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This is the law that suggests things like 80% of your sales come from 20% of your customers?

Or the 20% of customers who give you 80% of your grief.

Pareto’s Law can help to identify the 20% that most of your effort should be concentrated on. You may not even need the other 80% at all.

Perhaps the same is true of many of other things – 80% of your sales come from 20% of your sales force or perhaps 80% of your employee problems are caused by 20% of your employees.

Always look to see with everything if the extra 20% you get is worth the 80% of input. It can be a very useful law for identifying where you can make the biggest changes in your business.

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Southside Accountants are pleased to offer free one hour consultation to anyone requests this through The Generator Business Centre Mitcham -020 8408 1501. This is in line with the ethos of The Generator Business Centre -nurture new and existing businesses.

Furthermore, we are pleased to provide this consultation without any commitment on your part. The aim of this  consultation is to support you with your business plans. We promise not to sell our services or ask you to become our client. This would not be the purpose of the meeting. All we ask is in your own time leave us on an honest testimonial.

Here are some areas that we can help you on:

• What is the most suitable business structure for you? Sole trader? Partnership? Limited company?
• Who do you need to inform about your business?
• How to inform all government departments about your business
• How do you keep everything legal?
• What records to keep and how to keep them?
• Do you need an accountant?
• Do you need to register for VAT?
• Do you need a business plan?
• Any other tax or accounting issue you may have.

Who will you see?

You will meet the Aziz Sattar founder of Southside Accountants. He has vast experience in advising start-ups and small businesses.

Aziz earned a Bachelors of Honours in Accountancy from University College Cardiff. He then went on to become a Chartered Certified Accountant. He further sharpened his business skills and gained a Masters in Business Administration from the Open University.

Aziz Sattar MBA, FCCA, BSc (Hons)

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A frequently asked question by sole traders and partnerships is about basis period (the dates their self assessment returns should cover). They are clear laid down rules on this area under tax law. This is best explained by an example:Pauline starts to trade on 1/08/2009 making up the accounts to 31 July 2010.

First tax year

The basis period for first tax year runs from the date trade starts to the next 5/4. So in Pauline’s example, the first basis period will be from 1/08/2009 to 31/03/2010 or 5/4/2010. This would be for the tax year 2009/10.

Second tax year – You need to ask a series of questions

Here I am responding to these questions by using Pauline’s example.

Is there a period of accounting ending in tax year 2010/11?

Yes – The accounting year end is 31/07/2010.

How long is this period of account?

12 months or more? In Pauline case it is 12 months exactly to 1/08/2009 to 31/07/2010.

So in tax year 2010/11 Pauline will be tax on the profits of 12 months to 31/07/2010.

The third tax year (2011/12)

This will be the period of account ending in the third tax year. In Pauline’s case this would be 1/08/2010 to 31/07/2011.

Later tax years

The basis period would be the period of account ending in the tax year. This is known as current year basis of assessment. In Pauline’s case the fourth tax year would be 2012/13. This would cover her accounting period 1/08/2011 to 31/07/2012 and so on.

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With the average 40-year-old man having just 180,000 waking hours left to live, it’s important to make the best use of them. Here is a list of  top time management tips for you to apply…

• Prioritise your workload.

• Write a priority action list at the end of each day, ready for tomorrow.

• See the job through – don’t start, put it down and come back to it as it wastes time getting started again.

• Delegate wherever possible. Especially unimportant jobs.

• Hold efficient meetings. Consider if they are needed at all? Holding meetings standing up or on the phone will shorten them and avoid wasted chitchat.

• Say “NO” if you’re not the right person to ask.

• Put time aside when colleagues know you’re not to be interrupted each day.

• Don’t do everything to perfection. Being 100% perfect takes twice as long as 90% perfection, which is often good enough.

• Use call logging sheets, not scraps of paper, to record phone calls.

• Distinguish between urgent and non-urgent interruptions. Something that is important isn’t always urgent.

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Lots of people dream of having their own small business. Why work for someone else when there is less job security and they are expecting more and more work from you?

However it is overlooked that to run a successful business, especially in the early years you need…

• Motivation
• Focus
• Capacity to work hard
• Self –reliance
• Support of your family
• A skill or a good product.

Starting your own business takes determination, perseverance and self-discipline. Beware if you are starting for negative reasons, perhaps just because you dislike your boss or you like drinking in pubs and so thought it would be great to run a pub. Running your own business is a big step. Take time to consider and plan.

It’s not playing golf when you want and taking holidays when you want. There can be a lot of admin and red tape to deal with. The customer becomes your boss and they pay your wages.

Of all the tens of thousands of people who still start a business of some sort…

• By the end of the first year, 40% will have failed.

• Within 3 years, 56% will have failed.

• Within 5 years, 76% will have failed.

Of those who go past 5 years, there’s no guarantee they will survive the next 5 years.

So what are the common problems suffered by small businesses…

• The owners work too hard and for too many hours.

• Personal objectives of the owners such as hobbies and spending time with their family end up low down on the list of priorities.

• The owners spend too much time doing the day-to-day technical work rather than planning and managing the business.

• The owners don’t know where their business is going.

• The owners don’t understand that in order for a business to have a good sale value it must work without them.

• Many owners get frustrated and simply give up and go back to being an employee.

• The rewards don’t match the effort.

They often face common problems in managing their business…

• No consistency in delivery of their product.

• Can’t depend on their employees to get it right.

• They focus on people rather than systems, which creates problems when the people leave.

• Systems that are in place are not documented but in the head of the person who leaves.

• The owner ends up doing everything.

• Employees are not as diligent as the owners.

• The owner spends too much time filled up with other people’s problems and administration.

• The owner always has to supervise and guide employees.

• They have no idea how they compare with other similar businesses and competitors with respect to financial performance or non-financial areas such as human recourses, production, marketing, etc. They therefore don’t know where there are areas for improvement.

With regards to marketing these are common problems for small businesses…

• It’s done ad hoc rather than in a systematised way.

• They don’t know what works.

• They don’t fully understand why their customers buy.

• They don’t know who their most profitable customers are.

• They don’t measure their marketing results against costs.

• They take on customers they later regret dealing with.

• Bad debt problems.

Then there are the dreaded financial problems…

• Relying on short-term overdrafts to try to support long-term growth.

• Over relying on the bank due to over trading.

• No system for projecting income and expenditure.

• No system for measuring key financial indicators against their plan.

• Accounts are not useful to the business.

• Accounts are not produced quickly enough.

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