It got me thinking. What was the worst thing that could happen? If the plan didn’t work, there was still a business, a reputation, and a lot of goodwill. Life might not be easy, but life would carry on.

When starting a business, it is essential to know what your bottom line is. If the idea doesn’t work, when is the right time to walk away, or change the plan?

To some, running a small business is almost a hobby – the impact of financial failure is minimal due to other streams of income (for example a partner’s salary). But if the consequences of failure are more material (no money to pay the rent, buy petrol, or eat), then knowing when enough is enough starts to seem sensible.

Motivation to succeed is often fuelled by an appreciation of the consequences of failure.

In the same way that success can be measured in terms other than pounds in the bank, so can failure. Working out what you want, or what you don’t want to lose, is harder than you think when you start to think beyond the bank balance.

I am not suggesting that businesses should always worry about the worst case scenario, but I would suggest that having the option to quit while still ahead is better than the alternative.

So, having identified the worst case scenario, now it’s time to focus on the positives, aim high, and succeed!

Unless you drive in excess of 20,000 miles a year, you will be far better off claiming for each mile you drive, than to try and take a tax hit, or claim a percentage of your direct costs.

You may recall that, in the recent budget, the rate you can claim for the first 10,000 miles has increased from 40p to 45p. This gives you a potential extra £500 per year to claim.

If you use your own car for business purposes, you should be claiming expenses to offset the costs that you are incurring. As well as the fuel you use, you are allowed to claim for running costs such as repairs and maintenance, MOT, tax and insurance.

It doesn’t matter of you are self employed, or working for a company, as long as the miles you travel are for the business, and are not personal. The exception to this is your regular commute. You cannot claim for the miles driven to and from work, if you work at the same place most days. However, trips to the post office to buy stamps, to visit clients or suppliers, to visit business partners, or attend meetings are all allowable.

You may not know this, but you can also claim reimbursement if you use a bicycle to get around for business. A few years ago, the government introduced a mileage rate if you use your bicycle for business. A great way to stay fit, help the environment, and claim a tax deductible expense!

If you are VAT registered, you will need to collect VAT receipts for your fuel (not necessarily for the actual fuel you use), ensuring that the receipts are dated within your claim period.

I have created a very simple spreadsheet to help you calculate how much you can reclaim as expenses if you use your own car (or bicycle!). If you would like a free copy, please call or email me, and I’ll let you have a free copy.

I have been taught that a good Finance Director knows everything, and that a really good one will get everyone else to do it for him (or her). I am not so sure any more. I think a good Finance Director knows how to find out everything he doesn’t know, and that a really good one will help others to do the best they can. After all, a really good Finance Director knows the financial situation, has a good idea of the aims of the business, and a pretty good idea of what every department is trying to achieve. I agree that generally it is up to others to make things happen.

More than any other department, Finance is judged by a very simple metric, is the business performing as well as it can. It’s existance is not about sales, or marketing, or brand awareness; and yet a good Finance Director is assessed on how well the business as a whole is doing.

So what has this to do with pensions? Well, it reminded me that I don’t know everything about pensions, but I do know the questions to ask to ensure the business is compliant. I also know what to ask to see what plans the business has in place to make the most of its staff and goals to see if it is as successful as it can be.

A good Finance Director is good with numbers; a really good one knows what questions to ask. How good your business is depends on how well you can answer the questions.

The answer to the question is not defined by you, but by the tax office.

Take your telephone bill as an example. The tax office is happy to accept a telephone bill, even a mobile phone bill, as a business expense if you are a limited company, but not if you are self employed. If you are self employed and have a mobile phone, the tax man will assume that the contract is mainly for personal use. To prove your business use you need an itemised phone bill and details of which calls were for business, and which were personal.

Another area that often causes confusion is food and drinks (entertaining). Meals and drinks bought by a limited company can usually be called a business expense, but only very rarely if you are self employed.

If you are unsure about what is or isn’t a business expense, ask a professional, and then make sure that you understand what they tell you. I heard a story recently about someone who thought they knew what was allowed, only to find that their accountant had disallowed some items on their tax return (and not told them).

The logic behind the tax office’s decision on what is (and isn’t) a business expense may be archaic or confusing, but when the tax man knocks on your door and asks to see your accounts, the argument becomes irrelevant, as all that matters is the law.

If you would like to know more, or have questions, please ask.

The balance sheet tells you what you own, how much you are owed, and how much you owe to other people. Broadly speaking, assets are those things you own, or are owed, and liabilities are those things that you owe to others.

Liabilities include things like overdrafts, loans, and debts to other people (creditors). But are all liabilities bad?

Borrowing money means you have cash to do something with. If it costs you 5% to borrow £10k, and you are able to generate a profit of 7.5% through the activities you can make happen, then you are making a profit of 2.5%. Without borrowing the money you would have made no profit at all. So a loan can be a good thing, as long as you are making good use of the opportunity.

Investments in your business are liabilities. They represent the amount you have been loaned and, as above, you need to be sure you are making the most of the cash. Even “non-profit” organisations need to demonstrate that they are fulfilling their “non-profit” objectives. Is the cash sitting in the bank, or being used properly?

Liabilities also include Trade Creditors – money owed to your suppliers. It is important that you pay them within agreed terms, but don’t pay early if you don’t need to. This enables you to do something with the money.

All business owners and managers should know how much they owe to other people. Not just so they know how much they owe, but so they know how much cash they are sitting on that belongs to others and to be thinking about what they are doing with it.

The vast majority of comments emphasised complex and (to be fair) quite interesting ideas about how to get the best out of your website. But I felt they missed the point. Most businesses are run by hard working individuals who have not got time to understand and implement subtle marketing ploys.

Which brings me to the question of how you eat an elephant. The answer is, of course, a mouthful at a time. To try and take too big a bite out of a problem leaves you with bad indigestion.

You need a website for two reasons, to increase your brand awareness, and to generate sales, and not necessarily both at the same time. Whatever tactics you use to achieve your goal need to be SMART (Google this if you can’t remember the acronym!).

I believe that life is complicated enough without making it harder than it needs to be.

The next time you want to make your business better, talk to someone who can talk to you about it in simple “plain English”.

Identify the problem, break it into manageable chunks, and deal with it! Life is hard enough, without it being taxing.

• Ask yourself every day: “Am I doing the things today that will ensure my business is here in 12 months time? “
• If you are not doing things that are about your business being here in 12 months time, why are you doing it?
• Understand the difference between cash and profit – you can make a loss and make money, and you can make a profit and lose money.
• Learn what the Balance Sheet is.
• Write down what your business is for in less than 20 words. Print it out, laminate it, and stick it above your desk.
• A bit of luck can go a long way.

These all seemed a bit obvious when I was preparing the talk, but after the presentation the audience reminded me how easy it is to forget the basics.

I have had a few meetings recently with people looking to start a business. Some of the businesses were start-ups, some were buy-outs.

As a freelance FD, I was asked if the idea stood a chance of succeeding financially.

What we very quickly got down to was not CAN they make a success of the idea, but do they WANT to make a success of the idea.

Without the will to succeed, it’s very unlikely you will succeed.

With a determination to succeed, even average ideas stand a good chance of making money.

Realising the audience was at best sceptical (with a couple of exceptions!), and at worst cynical, I used the following images.

• Plain website = shop window, hopefully directing you to the door in.
• Blogging on your website = shop front glass now removed, allowing you to talk to potential customers, and for them to talk back (for example by leaving comments).
• Social Media (such as Twitter, Facebook, and LinkedIn) = you have left your shop and are walking about sharing your ideas, and encouraging others to talk about them as well (not always with you present).

It is a bit blunt, but seemed to get the key messages over:

1. Social Media is not something that only happens online – it’s a mesh of physical meetings and online activities.
2. Ideas that are spread through groups of people are far more powerful than ideas delivered to individuals.
3. Real engagement is when people do things for you that you didn’t ask them to.
4. Learn to lose some control – in return for greater reach.

With thanks to Steve Bridger (http://www.stevebridger.com/) for his insights…

The first thing that occurred to me was a simple excel spreadsheet that shows how the P&L links to the Balance Sheet, which links to the Cashflow, which links to the P&L. You get the idea – its a neat pro-forma.

Then there is my list of the various kinds of accountants that businesses use – there are more than you might immediately think. This is helpful because you need someone to look after all aspects of your business’s accounts and it’s easy to overlook something…

Then I have a list of accounting software packages I know, either through using them, or reviewing them, or simply on recommendation – handy when discussing potential changes.

I have a great contacts database, but that’s worth a little too much to just give away…

I keep wondering about a FAQ page for my website. Is there an accounts question you always wanted to know the answer to?

So at the moment I haven’t got anything to give away. Should I have something? Is what I do too intangible? Does a freebie make a website more attractive? What would you like?