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Accounting and Bookkeeping Basics that every business owner that Every New Business Owner Needs to Know

Accounting and Bookkeeping Basics that Every New Business Owner Needs to Know

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Accounting and Bookkeeping Basics that Every New Business Owner Needs to Know

Starting a new business venture by yourself is incredibly exciting, but it can be daunting, too – especially when it comes to accounting and taxes. The sooner you begin to learn about accounting, the less likely you are to run into trouble, which is why we’ve put together a basic accounting guide for new sole traders, contractors and freelancers who need a nudge in the right direction.

Separate Business and Personal Bank Accounts

They say you shouldn’t mix business with pleasure and this is especially true when it comes to banking. It’s important to create a separate bank account for your business expenses and transactions, for several reasons.

Firstly, this creates a log of your business-related transactions. This saves you from having to comb over your records and try to remember whether each purchase was business-related or not when tax season rolls around. As a consequence, you’re less likely to miss out on tax deductions and end up paying more than necessary.

A separate business bank account makes it easier to monitor your cash flow situation and understand how much you can afford to spend. It also helps to maintain business credibility, which is important when seeking financing.

It’s also worth arranging a business credit card. Business credit cards typically have a higher limit than personal ones, which is useful since business expenses tend to be higher, too. This will help you to smooth out any cash flow issues you face without putting your personal credit score at risk.

Invoice Management

Invoice management is a simple but crucial part of effective cash flow management. Not only is it important to send invoices on time, with a clear itemised bill and the correct payment information, but you also need to be proactive about chasing up late paying clients, too.

Track Expenses

Invoice management is a simple but crucial part of effective cash flow management. Not only is it important to send invoices on time, with a clear itemised bill and the correct payment information, but you also need to be proactive about chasing up late paying clients, too.

Go Paperless

Of course, you will need to keep hard copies of certain important documents but going as paperless as possible is a great way to stay organised and make accounting easier. There’s really no need to store everything in a shoebox anymore.

Accounting software can do everything from generate invoices to storing receipts, eliminating your need for an overflowing filing cabinet.

Electronic payments are also much faster to process than old-fashioned cheques, which is great news for your cash flow.

Don’t Forget About Taxes

Employees with regular paychecks tend to spend a fairly minimal amount of time thinking about tax, but as a solopreneur you need to be much more proactive. For every invoice payment you receive, you need to set aside anywhere between 15-30% of that sum, depending on your annual earnings and business type. It’s important to be aware of this and budget accordingly so that you don’t receive a nasty surprise when the tax year ends.

Summary

Accounting and bookkeeping doesn’t have to be difficult. By staying organised, being proactive and taking a common-sense approach, you can overcome many of the common pitfalls experienced by new solopreneurs.

Being proactive about expense tracking and invoice management will give you a huge leg-up. By separating your personal and business accounts and using accounting software, keeping your records in order becomes far easier. 

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5 Common Tax Deductions that Small Business Owners Often Overlook

5 Common Tax Deductions that Small Business Owners Often Overlook

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5 Common Tax Deductions that Small Business Owners Often Overlook

They say that only two things are certain in life: death and taxes. Pay

Of course, in order to claim the following tax deductions, you need to be on top of your bookkeeping. Get into the habit of updating your records and file all of your receipts and invoices in a well-organised system.

1. Startup Expenses

Money is usually tight during the startup phase and every penny counts, but many small business owners overlook startup costs. Don’t assume that it’s too late to claim, either; in the UK, for example, limited companies can claim relevant startup expenses for up to seven years before the business officially begins operations. Just because you’ve been in business for a few years doesn’t necessarily mean that you’ve missed the boat.

2. Home Office Expenses

If a room in your home functions as your primary place of business then you may be able to claim a home office deduction. Expenses such as gas, internet and electricity will usually be deductible based on the percentage of your home used for work, and for how long. Therefore, it’s important to keep a record of how many hours you work each month in order to calculate this deduction.

You will also be able to claim expenses such as office furniture, although again you will have to calculate the usage portions. If you buy an office chair for £100 and use it exclusively for work, then you can claim the full amount. However, if you use it for personal reasons 30% of the time then you will only be able to deduct £70 from your taxable income.

3. Carryovers

Business owners often overlook capital and net operating losses as tax deductions. It’s possible to carry these losses over into future tax years to reduce taxable income. With so many small businesses suffering due to the covid-19 pandemic, this is definitely a deduction to make note of. Carryovers can be used to reduce either the business’ or the owner’s income. It’s best to speak to your accountant about how your business can best benefit from this type of tax deduction.

4. Losses on Bas Debts

If your business loses money due to a customer who won’t pay, an employee who quit after receiving advance wages or loans to clients that your business is now unable to collect then you may be able to claim this amount as a tax deduction. You will have to prove that you have taken reasonable steps to collect this amount but have been unable to do so. Of course, this situation is less than ideal but it may help to soften the impact of a bad debt.

5. Education and Training

It’s a good idea to invest in your employees and you should be able to deduct the cost of doing so. Many business owners overlook the fact that educating and training their employees is a deductible tax expense, so keep a careful record of your spending in this area to receive a smaller tax bill.

Summary

We would all like a smaller tax bill, so be aware of these often-overlooked deductions to ensure that you don’t end up paying more than necessary. It’s important to keep a careful track of all of your expenses so that you don’t miss out on any potential tax deductions. If you’re unsure about whether an item qualifies for tax deductions, be sure to speak to your accountant or bookkeeper so that you don’t end up making a costly mistake.

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How to Align Your Personal and Business Goals

How to Align Your Personal and Business Goals

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How to Align Your Personal and Business Goals

Knowing how to set business goals and align them with personal goals can increase productivity, profits, and employee motivation.

Business goals don’t always have to reflect the personal goals of the employees, nor those of the owners or management. However, if a company member starts thinking that their work doesn’t provide them with benefits or growth, their productivity and outputs may suffer.

A good leader and manager needs to have the company’s interest in mind, as its purpose stands above that of an individual. However, that becomes impossible when members don’t feel valued.

Setting the business goal in accordance with employees’ personal growth and plans will help them reintegrate into the office and keep productivity and morale high. These are some of the most effective methods for workforce alignment.

Tip #1. Know the Mission and Vision

The company’s vision is the ultimate goal and the purpose behind its existence. It serves as an imperative and puts the business as a timeless entity that solves a particular problem in society. The company’s mission, on the other hand, is the way it operates and how it plans to achieve the vision.

Keeping the mission and vision statements clear and easy to remember helps ground the employees, as well as the leaders, allowing them to become part of a well-oiled machine that provides the best service possible.

Tip #2. Make Goals SMART

In the business dictionary, the goals need to be SMART:

  • Specific
  • Measurable
  • Achievable
  • Relevant
  • Timely

Ensuring that all company goals and mission statements abide by these measures allows management to have an easy overview of how employees and the various departments perform against expectations.

SMART goals benefit from being easier to break down into component pieces, allowing for more straightforward task allocation, management, and reporting.

Tip #3. Focus on Goals Rather Than Incentives

Providing workers with incentives doesn’t give them a lasting benefit or change their way of operating within the company. These temporary solutions usually only hurt long-term performance and productivity by enforcing a culture of coercing employees to finish work to receive a reward.

Furthermore, incentives that are not worth the apparent effort will hurt the company’s standing as a worthwhile employer and may put off future clients. Upper management can also hurt profits if they dole out incentives for tasks that should be the norm.

Tip #4. Ensure a Good Cultural Fit

Employers have the final say on the formalization of company culture and statement. And employees who don’t align with these goals won’t further the company’s vision and may clash with management.

Properly vetting candidates for important business positions will ensure their goals align with both the leader’s personal goals and the company’s mission statement.

For example, an interviewee that looks perfect on paper but lacks the teamwork needed for the role probably won’t relish a team environment.

The Endgame

A company’s goal is usually relatively clear: achieve the vision and make a profit. However, employees’ personal goals can be different and more complex and thus, will need to be tackled on an individual basis for the business to succeed.

With proper management, transparent communication, and a goal-oriented culture, any company can accomplish growth and align members with its vision.

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Four Steps to a Successful Profitability Analysis

Four Steps to a Successful Profitability Analysis

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Four Steps to a Successful Profitability Analysis

Are you uncertain about the level of success you achieved?

There's a quick way to get an overview of your finances.

Not enough companies run a profitability analysis – a defining indicator of profit. Such an analysis relates to costs and overall revenue and it can provide insights into how a business runs.

The occasional analysis can also indicate if it’s time to make some changes.

Maybe some clients require too much time for the money. Perhaps there are other opportunities around the corner that you can jump on.

Either way, it should be on your list of tasks if you want to ensure long-term business growth. And here’s a simple blueprint to follow for a successful profitability analysis.

Step #1 Calculate Margins

Two of the most important variables in a profitability analysis are gross and net profit margins.

You can get the gross profit margin by knowing your sales revenue minus the cost of labour and other direct costs.

For the net profit margin, you must subtract all expenses from your revenue to get the magic number – the margin – and then divide the previous result by your revenue.

Don’t forget to look at the segment profits, too.

Odds are you offer a suite of services that each has its own revenue stream. Take the numbers for each segment, subtract the costs, and include overheads in your calculation.

If you do this, you get a more detailed insight into how money moves in your business.

Step #2 Perform Client Valuation

Here, you must look at each client and figure out how much each of them brings.

Performing a client valuation essentially means to determine the worth of each client. So, subtract from the revenue all of your costs, such as marketing, hourly labour, travel expenses, and so on.

After all, you want to find out the costs of keeping each client satisfied.

Some clients may not pay a lot for your services. But you may have a better profit margin with them if their projects take very little time from you or your team.

Maybe you have good cash flow. But it’s possible that when you draw the line, there’s not a lot of profit in it.

Step #3 Look at the Past Numbers

A thorough profitability analysis looks at past quarters over the years.

Why?

Although your current numbers may look good on paper, you need something to compare them to if you want to know where you stand.

Step #4 Benchmark Industry Ratios

Your numbers only mean something in the context of your niche. It’s because profitability numbers aren’t the same in accounting as in health care, education, e-commerce, etc.

If you look at your past and current numbers, you can figure out your business’s progress so far. But what about compared to your competitors?

What about your position in relation to the market?

Always be sure to check average industry ratios to give you a better sense of where your company is as opposed to where it should be.

Do it for Peace of Mind and Direction

A good profitability analysis can help curb anxiety when it comes to your business. At the same time, it can tell you what you should be doing to improve and grow it.

If you ever find your business lacking direction, remember that an analysis can help you spot issues that you couldn’t otherwise.

It’s a game changer.

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Three Tips for Streamlining Your Workflow

Three Tips for Streamlining Your Workflow

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Tips for Streamlining Your Workflow

Improper business workflow affects efficiency and performance in the workplace and can lead to a loss of profits.

Here are some tips on how to streamline the business workflow:

Streamlining business workflow, which is applicable across all departments, can be a universal process to save company resources and improve overall profitability and productivity.

A streamlined workflow will make it easier to put out a consistent product and develop uniform branding across different platforms. Also, employees won’t be overwhelmed due to project needs when given a set of clear procedures to follow.

Furthermore, unified processes for requests and complaints, as well as simple rules for project satisfaction will lead to smaller employee turnover, reducing the time spent training and explaining work processes.

All these benefits make it necessary for leaders and managers to take control and ownership over the workflow and make necessary changes and improvements to benefit the entire team and company brand.

Here are some of the best tips to streamline workflow and achieve better profits:

Streamlining business workflow, which is applicable across all departments, can be a universal process to save company resources and improve overall profitability and productivity.

A streamlined workflow will make it easier to put out a consistent product and develop uniform branding across different platforms. Also, employees won’t be overwhelmed due to project needs when given a set of clear procedures to follow.

Furthermore, unified processes for requests and complaints, as well as simple rules for project satisfaction will lead to smaller employee turnover, reducing the time spent training and explaining work processes.

All these benefits make it necessary for leaders and managers to take control and ownership over the workflow and make necessary changes and improvements to benefit the entire team and company brand.

1. Evaluate Current Processes

The first step in streamlining the workflow is proper documentation and evaluation of all processes that take place in the work environment.

It might sound counterintuitive, but some companies have processes that have grown too convoluted over time and without proper management, slowing down the rest of the company as a result.

Some of the essential data gathered in evaluations include:

  • Number of items initiated, completed, and rejected over a period
  • Average, minimum, and maximum times required to complete a task
  • Number of clarifications needed for a task

Additionally, soliciting the opinions and experiences of your employees in a survey can point to parts of the workflow that are creating unnecessary steps or bottlenecks.

Once a proper estimate of the current workflow is complete, focus on improving one problem at a time and testing it out before making further changes. A complete overhaul at once might prove to be as problematic as the original.

2. Simplify Processes

Overcomplicated processes can lead to errors and lack of clarity on the task at hand. A workflow contains many parts, but a process has a way of growing over time to encompass smaller ones, which can cause a bottleneck and reduce productivity.

Breaking down a complicated part of a workflow into its constituent pieces is the best way to streamline it. And keeping only the necessary steps will lower the risk of errors and improve productivity.

3. Automate

For some processes, automation is the best way forward. Menial and repetitive tasks are best left to automated solutions, as this can leave employees with more time to perform the more-vital duties instead.

Additionally, discreet, purpose-made software is less likely to make errors in carrying out mundane tasks and doesn’t need much monitoring.

Automation software often has a high return on investment, especially if you’ve put in the work to survey the market and find the best solution to the problem.

Work smarter, not harder

Streamlining the workflow of various company departments is only the first step in improving productivity. Bringing those departments together and improving cohesiveness and collaboration can be an equally important task.

Thankfully, online seminars and automation tools are widely available to help out in this aspect.

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How to Avoid Common Money Leaks in Your Small Business

How to Avoid Common Money Leaks in Your Small Business

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How to Avoid Common Money Leaks in Your Small Business

Money leaks in your small business

eat away at your profits without you even knowing about it. Even if your business seems to be in great financial health, you should regularly check for leaks to ensure that you’re not unwittingly wasting money. Plugging money leaks can help to reduce your spending and thus boost your profit margins without too much extra work on your part.

Here are the most common money leaks to look out for, and how to fix them.

1. Online Advertising

It’s easy to let advertising fees get out of hand. Social media pay-per-click fees may seem small, but they do add up and can present a significant money leak for your small business. Keep a close eye on any social media or Google advertising campaigns to ensure that you’re not running up a big bill. It’s also important that you regularly review the effectiveness of these adverts. If they’re not bringing in business, they’re a wasted expense.

2. Subscriptions

At some point, we’ve all signed up for a free trial with no intention to continue, then forgotten all about it and ended up paying. Other times, we stop using a service but forget to cancel the subscription. It’s all too easy to let your business leak money this way, but it all adds up. Review your subscriptions regularly and promptly cancel any that are no longer benefiting you.

3. Power Usage

Small mistakes like leaving the lights on overnight and forgetting to switch off devices may not seem like a big deal, but over time they can seriously eat into your profit margins. It’s important to get into good energy saving habits and encourage your staff to do the same.

There are many other ways to cut down on electricity usage, such as investing in insulated blinds or switching to energy-efficient lightbulbs. Although these changes do present an upfront cost, they will save your business a significant amount of money in the long term.

4. Office Supplies

It’s easy to go over-the-top with office supplies, so take some time to assess what is and isn’t necessary. Thousands of multicoloured sticky notes are fun, but they’re hardly a necessary expense. Furthermore, many businesses waste a lot of money on printing, which is easily avoidable in the age of cloud-based software.

5. Credit Card Fees

Being lax with your credit card payments is a surefire way to create unnecessary costs. By clearing your balance each month – or at least as much as possible – and paying attention to any annual or hidden fees involved, you can save your business money and boost your profit margins.

When signing up for a credit card, don’t get distracted by the attractive rewards. Make sure that you read the fine print and understand the fees before you choose a card. This will help you to use your card wisely and avoid any money leaks.

6. Smartphone Bills

If you’re not keeping a close eye on your smartphone bills, you could be paying a lot more than necessary. Make a habit of reviewing your charges every month to ensure that you and your staff aren’t exceeding your plans. Take a close look at your usage, too, because you could be paying for more than you’re actually using. It’s also worth shopping around regularly too to see whether or not you could benefit from switching plans or providers.

It Pays to Plug

By plugging these common money leaks, you can cut down on costs without making any real sacrifices. Regularly checking for leaks helps you to make your business budget go further, so make sure you don’t grow complacent. Get into the habit of regularly performing basic checks to maintain a healthy profit margin and prevent your business from losing money.

Money leaks in your small business eat away at your profits without you even knowing about it. Even if your business seems to be in great financial health, you should regularly check for leaks to ensure that you’re not unwittingly wasting money. Plugging money leaks can help to reduce your spending and thus boost your profit margins without too much extra work on your part. Here are the most common money leaks to look out for, and how to fix them.

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7 Fatal Entrepreneurial Mistakes to Avoid

7 Fatal Entrepreneurial Mistakes to Avoid

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7 Fatal Entrepreneurial Mistakes to Avoid

Making mistakes is an unavoidable part of your entrepreneurial journey, but certain errors may prove fatal for your fledgling business. According to the USA Bureau of Labor Statistics, 20% of small businesses fail in the first year. Often, this is due to naivety or a lack of preparation. Let’s take a look at some of the most common and dangerous entrepreneurial mistakes so that you can avoid them and ensure that your business sticks around.

1. Failing to Get to Know Your Niche

When you’re full of ideas and enthusiasm, it’s tempting to skip the research step and dive straight into launching your business. However, the better you know your chosen industry, the more successful you will be. Take time to learn from your competition. Discover what it takes to succeed in your niche, and why others have failed. Understanding the industry will help you to position yourself appropriately in the market, predict trends and gain a competitive edge. Find out what works, what doesn’t and what you can do better. If you want to swim instead of sink, make sure you do your homework before diving in.

2. Ignoring Expert Advice

Gut instinct is part of entrepreneurship but that doesn’t mean you should ignore the advice of others. It always pays to listen to and learn from more experienced business people who can offer you valuable advice and insights. Being overly arrogant and thinking that you always know best is a sure fire way to tank your budding enterprise.

3. Cost-based Hiring

Ever heard the phrase “pay peanuts, get monkeys”?

A company is only as good as its people. When you’re first starting out, it can be very tempting to find staff who are willing to work for low wages, but even one bad hire can be a very costly mistake for your business. If you’re starting a business with a tight budget, it’s natural to want to keep costs low but remember that bad hires reduce productivity, tank morale and require you to spend even more money on a replacement hire further down the line. Invest in quality staff from the beginning and you’ll reap the rewards.

4. Neglecting the customer

Without customers or clients, you have no business to speak of. Ensure that you create all of your products and/or services with the customer in mind and create a customer-first philosophy to underpin your business. Repeat customers are your greatest source of revenue. Research by Invesp Consulting found that increasing customer retention by 5% boosts profits by a whopping 25-90% and acquiring a new customer is up to five times as expensive as retaining an existing one. It really does pay to put the customer first.

5. Setting Unrealistic Goals

It’s great to be ambitious, but it’s equally important to set achievable short-term goals to keep you motivated and maintain a sense of direction. Short-term goals are great benchmarks to measure your progress, as it can be more difficult to understand where you are in relation to a goal that’s months – or even years – away.

6. Neglecting Marketing

Unfortunately “build it and they will come” is not a good business philosophy. It’s essential that you invest in marketing for your start up. You can offer the greatest product or service in the world, but that doesn’t mean much if no-one knows about it. A good marketing strategy will help you to stand out from the crowd and be heard above the noise of your competitors. If you want to see healthy profits you have to invest in marketing.

7. Trying to Do Everything Yourself

Many entrepreneurs try to handle every aspect of their business by themselves. This is a mistake that not only leads to burnout, but also prevents you from completing tasks to the best of your ability. Knowing when to outsource and delegate certain tasks is key to your survival as an entrepreneur and the sooner you learn how to do it, the better. Outsourcing tasks such as admin, accounting and content creation will free up your time to concentrate on what matters most to you: growing your business.

Set Yourself Up For Success

Being aware of and avoiding the above entrepreneurial mistakes will set your start up in good stead for success. It’s great to be passionate about what you do, but remember not to jump in too quickly or ignore the advice or more experienced business people. Entrepreneurs are often caught up in their grand ideas and forget to pace themselves and focus on what really matters. By remaining mindful of the aforementioned mistakes, you can ensure that you stay in business for a long time to come.

At Woodville Accounting & Payroll one thing we do is help start-ups set up their business and finance function, while offering continued support with their business growth.

If you would like more information or to discuss any of the comments made in the above article then please contact us at [email protected] or complete our on-line contact form.

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5 Common Accounting Mistakes That Small Businesses Make

5 Common Accounting Mistakes That Small Businesses Make

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5 Common Accounting Mistakes That Small Businesses Make

Accounting is notoriously complex but as a small business owner, good accounting practices are essential to the financial health of your organisation. Taking your accounting seriously from the start is the best way to set your small business up for success and it will allow you to operate much more efficiently in the future. Bad accounting, on the other hand, can lead to financial and legal difficulties that may seriously threaten the survival and success of your enterprise.

Here are the most common accounting mistakes made by small business owners so that you can avoid them. Mistakes compound over time, so it’s important to pay close attention to your accounts right from the very beginning.

1. Procrastination

One of the most common accounting mistakes that small business owners make is waiting too long to prepare their financial information. When tax season is months away, it’s very tempting to put accounting off until later but this is a dangerous misstep. The longer accounting mistakes go unnoticed, the more damage they are likely to do to your business.

In order to make sure that your financial information is as accurate as possible, update your books on at least a weekly basis. This makes tax season far more manageable and prevents you from making mistakes that will require a lot of time and money to fix.

2. Misunderstanding Metrics

New business owners in particular often confuse terms such as revenue, net profit and cash flow. A common financial mistake that small businesses make is focusing solely on revenue without subtracting expenses to calculate their net profit. This can lead to serious overspending.

Furthermore, many new business owners get carried away and forget that there may be a significant difference between their net profit and their NOPAT (net profit after tax). As well as encouraging overspending, this can lead to significant financial problems when it’s time to file a tax return.

3. Mixing Personal and Business Banking

Sole traders are legally permitted to use their personal bank accounts for their business, but this is not the wisest course of action. It’s best to separate your business and personal bank accounts as soon as possible in order to avoid financial blunders.

For one thing, going back over your bank accounts and trying to remember which transactions were personal and which were business-related is a sure fire way to give yourself a headache. It’s also a huge waste of valuable time that could be better spent growing your enterprise. Additionally, you may face an array of legal problems should your business be audited.

4. Miscalculations

Simple mathematical mistakes are all too easy to make, but an innocent error can compound over time and damage the financial health of your business. It’s important to concentrate fully and double-check every entry. Accounting software can automate many calculations for you to ensure accuracy, so a subscription may prove a worthy investment.

Trying to do it all yourself

Trying to handle your accounts by yourself is a costly and time-consuming mistake. Many small businesses attempt DIY accounting when they first start out in order to keep costs low, but this can actually slow down their growth and threaten their financial health.

At a basic level, hiring a qualified and chartered accountant helps business owners to avoid expensive accounting mistakes and saves them a huge amount of time, allowing them to focus on growing their business. Furthermore, accountants can save businesses a significant sum of money on their tax returns, thanks to their up-to-date knowledge and financial expertise. Although hiring an accountant does present an extra cost, it generates a very lucrative ROI.

A good quality accountant will also bring market knowledge to the table and can help business owners to present a strong case to potential investors, further accelerating the growth of the organisation.

Conclusion

Like it or not, accounting is part and parcel of running a business and it’s very important to do it correctly. By taking accounting seriously from the very beginning and hiring professional help, you can protect your business against the above accounting mistakes and focus on growth instead of putting out fires.

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The Best Ways to Increase Your Conversions

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The Best Ways to Increase Conversions

Learning how to improve the conversion rate for your existing traffic can be more beneficial than expanding product lines or cutting costs.

Sites with the highest traffic do not necessarily have the best conversion rates. In fact, a conversion rate of only 0.2% means getting only two customers in every 1000 visitors, which can be extremely low even for a high-profile page with loads of traffic.

Here are some of the best ways to improve conversion rates quickly and efficiently.

1. Remove Sign-Ups

Forcing users to sign up for a new account before they can purchase a product or service is one of the quickest ways to lose them as a potential client. Most people find it tedious to enter their information for every product they buy.

Making the purchasing process intuitive and waiving the permanent account requirement will allow visitors to buy on the spot and increase your conversion.

2. Simplify Purchases

There are a few ways to simplify the purchasing process beyond the sign-up. 

For example, removing unnecessary fields from surveys and purchase forms can lead to a better conversion rate. Furthermore, making the steps of the purchase process prominent and easy to follow can be the key to getting a user to buy.

Simplification can’t go too far, however, or the marketing and sales teams could lose the ability to conduct proper lead management.

3. Add Reviews and Testimonials

Users are most likely to trust what other users have to say about a company. That’s why adding testimonials from satisfied customers can lead to a sense of safety and security in your services.

Logos of prominent companies that use your services on the homepage will build future visitors’ trust and increase the click-through rate.

4. Perform A/B Testing

Some users don’t look at the content of a website beyond the headline. If there are a few viable choices for the website copy, an A/B test will ensure that the best version is presented to the consumer.

A/B testing can work on any part of the webpage. However, the standard practice is to compare one change at a time and conduct separate tests to optimize your digital asset.

5. Provide Trust

Most people won’t buy a product when they aren’t sure about the company behind it. Fortunately, there are several ways to build trust with potential customers.

It’s best to keep the business’s contact information, such as the address, publicly available and readily accessible. It’s because visitors are more likely to purchase something if they can see the company behind it.

Additionally, it’s advisable to keep pop-ups and ads to a minimum. Frequent distractions will move users away from the website. But if ads are a must, clearly point out sponsored content.

Blog posts and websites also need regular updating. A website that was last updated two years ago is less likely to attract new customers. Cheap-looking pages and graphics also tend to have a similar effect

Less Is More

Keeping the website clean from distractions and annoying pop-ups and sounds will allow users to read through its content unimpeded. And simplifying the steps between introduction and purchase and streamlining the process will help visitors decide to buy the product on short notice. 

Market research is a continually growing field, and there are many lessons to be learnt for even the most experienced companies.

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Five Ways to Reduce Costs and Boost Your Profitability

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Five Ways to Reduce Costs and Boost Your Profitability

Not sure why your bottom line is not pretty? Sometimes, overspending can hurt your profitability despite your record sales.

Profitability does not only come from sales numbers and a profitable business isn’t always the one with the most customers and the highest sales. Profitability depends on what is left in the account at the end of the month or the fiscal year. It is important to account not only for the money coming in but also the money going out. That is why cutting costs is one of the best ways to boost profitability… if you do it right. IMPORTANT some costs are good. Good costs generate a return on your investment so do not cut these. Instead try and get a better deal on these ones.

Tip #1 – Address Material Costs

Sellers of products are most concerned with raw material costs. That is why increasing profitability can be as simple as lowering manufacturing and or development costs. You would be surprised at how much this move can make your business profitable. To maximise your opportunities to increase your profitability you need to understand the cost make-up of each finished product.

Tip #2 – Reduce Labour Costs

Can any of your labour processes be replaced by automation? Have you considered hiring a VA as opposed to an on-site assistant? Reducing the amount of money spent on wages can also boost profitability when you draw the line on your finances. So, evaluate the daily tasks that your team members perform and look at some of your own duties as a business owner. In today’s environment, outsourcing is one of the best ways to cut costs. It is also one of the smarter ways to hire as you may have access to a wider pool of experts. Properly executed, you can lower costs and maintain a high level of quality with outsourcing.

Tip #3 – Manage Expenses

Many businesses are overpaying for marketing. For example, hotels may work with a variety of travel agencies even though a couple of them may be bringing in the bulk of the bookings. In that scenario, it may be a good idea to drop the non-performers. The same principle applies to all other expenses and services. If you pay for things and they do not end up improving your business or what you offer, these may be expenses worthy of the chopping block. This would affect your bottom line directly.

Tip #4 – Know What Cost to Cut

If only cutting costs were simple, right? Most business owners do not know where to start. If you are one of them, it is ideal to start by performing an internal audit of your finances. Identify where all the money comes and goes and decide what you can or can’t cut.

Tip #5 – Get Better Deals

Many industries work with vendors, which happens to be a great area to look at if you want to boost profitability. You may already know that it is possible to renegotiate vendor contracts, though it is easy to be put on the back burner. Getting better deals, however, does not always have to involve other vendors, as you can also leverage your relationships with existing vendors. You can even consider changing service providers and utility contracts.

cut cost Smarter, not harder

You do not have to make massive cuts in a single department. Even small amounts add up to significant savings if you make enough of them here and there. These tips are particularly helpful to anyone operating a cash flow-dependent business. That said, they apply to both B2B and B2C companies looking to boost their bottom lines.

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5 start accounting firm near swadlicnote
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