The Impact Of The 2010 Budget
The 2010 emergency budget has not brought much help for the majority of small business in the UK
. Virtually every small businesses sells direct to the public, so they needed a budget that put more money in their potential customers' pockets. Raising VAT to 20% has definitely had the opposite effect. Combine that with the fact that 600,000 people will lose their jobs because of the cuts in public services and you can see that times will be hard.
A small business needs good cash flow to be able to stay in business. If cash stops coming in, a business can very quickly go into a downward spiral. At times like these, a good accountant is essential. An experienced accountant can review your cash flow and suggest ways to improve it and to minimise the impact of reduced cash flow on your business.
Big companies can weather a period of financial crisis more easily than small companies can. They have greater assets, which they can use to borrow against and they also have larger margins, which can be cut to take them through the lean times. However, there are still areas where small businesses can make savings; good accounts are essential to help identify where those cost savings can be made.
Had the government's emergency budget included: the freezing of business rates or the subsidising of commercial rates, this would have really help existing small businesses and people who want to set up a new small business. Since the budget did not include either of these measures, small businesses need to consider if they can reduce those overheads themselves. They may for example be able to move to smaller premises. Your accountant can help you to work out the true cost of such a move, so that you can see if doing so makes sense for your business.
Using your accountant to draw up a revised business plan after a budget is vital. This can take quite a bit of time, but without it you will not spot trouble until it is too late. You should do this after every budget for the best results.
by: Jusinda Meika.
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