Not for Profit | Numbers Knowhow

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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Take Business Seriously To Succeed

Mahmood Reza — Fri, 19 May 2023 09:14:29 +0000

There is no magic bullet to make your business successful. However, if you treat it as a hobby, then you’re bound to fail. That’s why you need to run it, deal with it, and approach it as it deserves. Firstly, what’s a business? One official definition of a business is the activity of making one’s living or making money by producing or buying and selling products. What it involves is a plethora of activities. These are: creating a product or service, promoting it, managing finances and resources, and building relationships with customers, and suppliers. A business can take many forms. It can be a sole proprietorship, a partnership, or a corporation. The goal of a business is typically to generate revenue, increase profits, and create value for stakeholders. And in order to be able to do this, you must take business seriously i.e. put in the hours. What’s a hobby? A hobby, on the other hand, is a regular activity done for enjoyment, typically during one’s leisure time, not professionally. And most importantly not for pay. And although a business too should bring you joy, doing it just to entertain yourself and fill your spare time will never take […]

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How To Price Your Products

Mahmood Reza — Mon, 17 Apr 2023 07:33:09 +0000

Are you sure that you’ve priced your products well? Or maybe you’re at the beginning of your business journey and you’re wondering what the best way to do it is. This blog will teach you how to price your products based on different pricing strategies so that you can avoid making a mistake from the early days. In addition, you need to know how to price your products when developing pricing strategies for your business. If your business sells things (if you are a retailer or a manufacturer), there is a different approach to pricing services. Overall, some things stay the same. Pricing must play its part in: meeting your business and marketing goals, and making a profit on a sustainable and long-term basis. Whatever model you choose to price your products will not be a one size fits all. You will have different pricing approaches to use within your business toolbox. Purpose and objectives drive the approach. Things to consider before setting prices Determine an accurate costing for the product or project. Estimate the target profit required for the product, project, or year to make the business feasible. This can be determined by a percentage – such as […]

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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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Why A Business Must Make A Profit

Mahmood Reza — Tue, 21 Feb 2023 10:33:27 +0000

Making profit must be at the top of your business goals – ignore that at your peril. Firstly, I am going to tell you why making profit is vital for you and your business. Secondly, I will tell you how you go about making profit. But before we go into that, let’s think about another very important question: Why are you in business? We all have our reasons for being our own boss. It could be financial independence, being more in control, helping others, freedom and flexibility. Maybe it’s life circumstances, a change of scenery, grabbing opportunities – and making money! For myself, I went into business over 28 years ago, started from my own back bedroom, because I wanted more control. I wanted to help people, I wanted to make an impact on their lives, I wanted to have that independence, make my own decisions, and make money. Why a business must make a profit – overview Making a profit is vital for your business. It is the fuel that keeps it going and helps you to grow. Without a profit, your business will eventually fail. And if you’re not making enough of one, then it’s time to […]

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