Business survival | Numbers Knowhow

Product Grouping & Its Financial Power

Mahmood Reza — Mon, 08 Jan 2024 08:54:46 +0000

Have you ever thought about product grouping? Or has it been something you’ve put on the shelf and it’s been collecting dust? How does it get you a greater financial understanding of your business? How product grouping can help Above all by looking at your business in terms of product groups, you can gain powerful insights into: where your money is coming from, and where it’s going. This information will help you forecast for the future and make your business more profitable. So with this knowledge in hand, you’ll be able to take control of your business and propel it forward. In other words you’ll have a much stronger framework for making decisions that will benefit your bottom line. Watch this video to learn more about the financial power of product grouping! Key takeaways This short vlog will enhance your knowledge, specifically about: How to group your products How to use product groups to analyse your numbers With this in hand, whether you’re a start-up or established, you’ll be able to move forward in your business. You’ll get that essential information which will be the basis for your future decision-making. Because you’ll know which groups make money, and which […]

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Overtrading: Spot It And Fix It

Mahmood Reza — Fri, 27 Oct 2023 08:25:48 +0000

Are you looking to grow your business? If so, then it’s important that you don’t overtrade. Overtrading is a very common problem for businesses. Furthermore, it can lead to financial failure even if you’re making profits in your business. That situation, folks, is known as overtrading and that’s the theme of my video today. So let’s get started on our journey together on avoiding overtrading in your own business. Let me introduce myself first of all – my name is Mahmood and I am an accountant who works with lots of small businesses just like yours every day helping them improve their profitability through better cash management practices such as understanding their true cost base so they can make more accurate pricing decisions for their products or services which leads directly onto improved gross profit margins which means higher net profits at year end for them too! One thing I see often is clients struggling financially because they’ve been trading beyond their means because they want growth now rather than waiting. Have you ever wondered how to spot and fix overtrading? If so, then this video is for you. Over the next few minutes, I’m going to show you how […]

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Performance Management System: 5 Tips

Mahmood Reza — Fri, 13 Oct 2023 10:57:38 +0000

Do you need a system that will track the performance of your employees in a consistent and measurable way? Then you need a performance management system for your business! Wondering how to create one? You’re in the right place! In this video, I’ll be talking to you about the five steps you need to take to create performance management system that’s perfect for your business. A balanced scorecard approach This is a performance management system aligned with a company’s core strategic goals. It includes the performance objectives of the business which it monitors, measures (and changes if necessary) with the end goal of achieving the company’s business plan. Why it might sound scary to business owners Creating and implementing a performance management system for your business can be a daunting task. There are so many factors to consider – from setting goals and measuring progress, to providing feedback and handling termination procedures. There are five steps to creating a performance management system are: Identifying your critical success factors, Setting your KPIs, Figuring out your initiatives, Reviewing your progress, and Taking action. This list might seem intimidating at a first glance, but having the right tools and advice, will definitely […]

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Manage Cashflow: Five Top Tips

Mahmood Reza — Mon, 21 Aug 2023 09:04:28 +0000

Wondering how to manage your cashflow? You’ve come to the right place. By the end of this blog, you’ll have read about top tips to manage your cashflow and you will be equipped with the necessary information to help you do a really good job at it. Cash and business But firstly, what is cash? It’s what gets paid into your bank account. It’s factual, and more importantly, is the lifeblood of your business. Secondly, why do we need cash? Your business needs it for a whole bunch of things. Typically, cash is needed for: So running out of cash, access to cash or poor cash flow is squeaky bum time. Your business will survive if your cash flow supports it. However, if you do a bad job at managing your cashflow, the cash will run out, or access to it will dry up. Unfortunately, it is the end of the business road if you reach that point. It’s not for nothing that the phrase “Revenue is vanity, profit is sanity, and cash is reality”, rings true. It’s good business practice to have a good cash flow management strategy. Here are the five key elements that you should include […]

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Choosing Your Business Structure To Save Tax

Mahmood Reza — Fri, 19 May 2023 09:49:21 +0000

Sole trader or limited company and Choosing your business structure to save tax ? Previously I talked about the differences between a sole trader and limited company. What you need to consider when deciding what business structure, you should adopt. You cannot make that decision without looking at tax. Moreover, how it works and how much you pay, and which is better. When it comes to crunching the numbers, I have just the thing for you! FREE online business and tax calculators. More of that later. Sole traders and taxation HMRC refers to sole traders as self-employed so that’s the term I will use. In normal speak self-employed refers to working for yourself. As a sole trader, or you pay pay Income Tax and National Insurance on your tax profits. Furthermore, the tax people (HMRC) see your profits as your income, just as they would see wages and salaries as income. The good news is that some of your tax profits are free from income tax and National insurance. Most people in the UK get a Personal Allowance of tax-free income. That tax free pot applies to income from all sources, for example self-employment, rental profits, wages and salaries. What is […]

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Leadership & Business Resilience

Mahmood Reza — Mon, 17 Apr 2023 08:07:35 +0000

Why leadership is key to your business resilience is the topic of this blog. Business resilience is what you need when running your business. The businesses that share these characteristics tend to be at a large, multinational corporate level. However, there are lessons that we can take from those and apply them to smaller ones. What is business resilience? Dealing with shit when it hits your business fan is one definition of resilience. Another more formal definition would be “adapting well when faced with adversity, trauma, threats or sources of stress” – a more official definition given by the American Psychological Society back in 2014. It’s really about having the right people, systems, and processes in place so that when things go south, you can bounce back quickly. Why is business resilience important? So, we’re not talking about how you can predict the next perfect event – that would be impossible. There are so many variables that happen in our business environment, there are so many “what ifs”. It could be a climate change issue, it could be an IT issue, or it could be a fundamental physical security issue. We can’t accurately predict what the next thing will […]

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Business Resilience & Information

Mahmood Reza — Mon, 17 Apr 2023 07:56:11 +0000

Organisations that thrive and do well have the element of business resilience. Resilient companies are those that will be most likely to push through challenging or uncertain times. What is business resilience? Business resilience is what makes a company adapt to disruptions while at the same time being able to run its day-to-day ops. What we need to point out about business resilience is that it all begins with knowing which business processes have to be maintained so as to overcome the disruptions that come along. The most important elements of a business resilience plan of action are: Preparedness (identifying the potential risks) Mitigation (managing the risks) Recovery Why information is crucial for business resilience Above all, business resilience is about having and acting upon key information. When you’ve got information overload flying all over the place, it can get very convoluted and confusing. So, get access to key facts in the areas of the business that you’re concerned with. Get that information in real time. For example, in the world of business transactions, you need financial data. A lot of businesses, even those of a reasonably large size, will still be using outdated annual accounts processes and information […]

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How Operational Gearing Affects Business

Mahmood Reza — Mon, 17 Apr 2023 07:01:48 +0000

The topic of this blog is how operational gearing affects your business. In a nutshell, it shows much risk you have and affects your survival, growth, and prosperity. But let’s take a step-by-step approach and start with operational gearing first. Operational gearing explained When we say operational gearing we mean the effect that fixed costs can have on the relationship that exists between sales and your operating profits. If your business has no operational gearing, then profits would rise at the same rate that sales increase. This blog (and video) will help you understand how this concept works and why it’s important to your business. We’ll also share our FREE online calculator which shows you quickly what your operational gearing looks like. Moreover, it allows you to play with options for managing your company’s operational gears, so they do not get in the way of profit growth. You can also see operational gearing as an indicator that measures the degree to which an increase (or decrease) in revenue affects your profits. The type of costs your business has To understand how operational gearing affects your business, we have to look at the costs that your business has. Naturally, it […]

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Decision Making Under Uncertainty

Mahmood Reza — Fri, 14 Apr 2023 09:10:10 +0000

Decision making when things are calm is not the same as decision making under uncertainty. Because when it’s business as usual, you pretty much just follow the strategy laid out in your business plan, and take action that you’ve planned out beforehand. But let’s face it, although every business goes through periods when things are running like clockwork, there will certainly be times that will be challenging. This, by the way, is part an parcel of running a business. And the challenges will come in different shapes and sizes. For example, not knowing if we’re going to keep certain clients, changes in costs due to prices going up, etc. It is those things that will take unpredictability or uncertainty a notch higher. As a result, we will feel the anxiety kicking in. However, regardless of the situation, in business it’s essential to make decisions quickly and efficiently. In this video, I go through the steps you need to take to make rational decisions when everything is going crazy around you. Here’s a summary of them: Stay calm, or become calmer Going back to the anxiety I mentioned above, it is vital to try to stay as calm as possible. […]

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What Is Break Even In Business?

Mahmood Reza — Fri, 14 Apr 2023 09:07:45 +0000

To understand break even, you first need to know the components involved with business activity. But how do you find out what your business requires to break even? What is break even in business? Your business breaks even when your sales cover all your costs – when neither a profit nor a loss is made. To be able to work this out in more detail, there are numbers that you can analyse. These include ‘sales revenue’, ‘fixed and variable costs’, and the ‘contribution margin’. Break even is the point where the total revenue generated equals the total cost incurred. To put it simply, this is achieved when all the money spent on production, marketing, distribution and administration is covered by the sales of the product. It is not uncommon for businesses to spend more than they earn, so knowing how much you need to sell to cover your expenses is crucial. Why break even is important Knowing and understanding your break-even point gives you better insight into your business, accountability and enables you to make important business decisions that will improve your profit margins and company success. You can pat yourself on the back when reaching that financial milestone! […]

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Undercapitalization In Business

Mahmood Reza — Tue, 11 Apr 2023 10:35:48 +0000

How to avoid undercapitalization and what it is, is the topic of this video and blog. It’s when the company hits a financial brick wall. But, let’s take a more step-by-step approach and explain everything so it’s easy to understand. In this blog (and vlog), you will find out the following: Undercapitalization To put it simply, it’s when a company runs out of money. The term describes a state in which a company does not have enough capital to perform its day-to-day business operations. In other words, it is a shortage of funds for the business which, in turn, cannot afford to cover what it spends. What’s more, it may also lead to the company being unable to pay its creditors. If you’re keen on watching videos, then click on it to learn something useful which could save your company from making some common mistakes and risk undercapitalization. If not, then scroll down and continue reading the blog. Why does undercapitalization happen? The reason why so many small businesses fail due to this issue is because they have a false sense of security in their own abilities. They think that because they are a good worker or a good […]

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Resource Analysis For Your Business

Mahmood Reza — Tue, 11 Apr 2023 10:32:16 +0000

Resource analysis for your business is what will help you with your business growth and success. Is the current set of supplies helping or hurting your business? Find out in this short blog (and vlog). Types of resources Firstly, we’ll look at what resources are. They can be divided into categories and sub-categories. Namely, two general categories: tangible and intangible resources. When speaking about a company’s resources, we could look at physical, financial, human resources, and intellectual capital. Business competencies Businesses need resources to operate at a level. On the other hand, they need competencies. So, let’s start by defining business competencies as the resources and capabilities of a company. Essentially, these are the skills, experiences, and abilities to use those resources. For example, there is no point in having a good reputation if you don’t exploit it effectively. The two main competencies are: The threshold level – which is about competencies that will aid your business’s survival. So, he threshold level is that at which your business can operate and keep things going and in working order. Competencies that give you a competitive advantage – this is about your business USPs or unique selling points (ones that make […]

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