Expanding your business requires a lot of financial planning, which could get overwhelming. Many entrepreneurs face the challenge of wanting to grow their ventures or personal savings but are held back due to inefficient financial strategies. We’ll look at practical advice in this article on raising capital for expansion while avoiding financial disaster.
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Manage Your Debts
It normally makes sense to pay off the debt with the highest interest rate or late payment penalties first if you have business loans or credit card debt. Ensuring compliance with your agreements is crucial to avoid potential penalties or additional interest charges. Prioritise repaying debt payments to prevent accumulating interest and maintain financial stability.
Establish A Growth And An Emergency Fund
Create a separate savings account or fund to allocate for business expansion initiatives and maintain regular contributions. This capital can be later deployed strategically when growth opportunities arise. Along with this, an emergency fund should be established.
The British Chambers of Commerce reported that 62% of UK small businesses experienced late payment issues in 2020. This highlights the importance of maintaining an emergency fund to mitigate cash flow challenges and sustain business operations.
Learn To Save On Corporate Tax
Due to their complexity, navigating corporation tax legislation in the UK can be very difficult for many business owners. However, there are ways businesses can implement tax-saving strategies, such as claiming your cost of sales, setting up employee share schemes and more.
Consulting with a tax professional can help a lot, and for some valuable insights, we have a list of eight ways to reduce your corporate tax.
Strategic Partnerships And Joint Ventures
Investigating joint ventures or strategic alliances can provide access to resources and knowledge that assist company expansion without requiring a significant financial investment upfront. By collaborating with complementary businesses, you can leverage each other’s strengths and improve the weaknesses to achieve mutual growth.
Creating Expense Optimisation And Automated Savings
Expense optimisation is an extremely crucial and wise way to save money. In fact, a study by the Federation of Small Businesses (FSB) reported that UK start-ups could save an average of £5,000 annually by optimising their energy usage alone. Another way to achieve financial savings is by focusing on automated savings.
Automated tools are far more effective than businesses relying on manual savings. Furthermore, automated tools can take off the hassle of manually separating savings accounts each month!
Conclusion
Apart from these helpful tips, you can save from profit reinvestment, planning a growth plan, and others. But to integrate these ideas, getting help from a professional accountant is better. Schedule a consultation with Bells Accountants to learn more. You can also shoot an email to or give us a call at 020 8468 1087.
