Make or break?

Xero have released the “Make or Break” report on what makes the difference between entrepreneurs who succeed a fail.

It’s based on 2,000 business owners in the US and UK and the results provide insights and ideas on how you can create a more successful business.

Six out of ten entrepreneurs believe family time is crucial to being effective. This includes keeping evenings and weekends free. However, just 28% turn off their phone and laptop off out of normal business hours.

Five out of ten invest in technology and strategic initiatives. And, 50% of successful business spend money on marketing campaigns (social media, advertising, PR), compared to 20% of those whose business failed.

Interestingly, when it comes to financial software – 58% of businesses that survive use software whereas only 14% of failures do.

Business survival rates are boosted with Xero. 88% of Xero customers operating after five years, compared to an industry average of just 41%.

Another interesting insight was the use of professional advisers – 33% of successful entrepreneurs sought outside help compared to just 14% of owners who had to close.

This is why we recommend all businesses consider using their accountant to help them  increase the chance of success. To support this Sackmans offers “Improving the Numbers” as a service option. This is a business planning and budgeting service for business owners who want to maximise their results.

A start-ups relationship with their accountant is important for survival. The Xero research supports our approach – 42% of survivors describe that relationship with their accountant as “excellent,” compared to 27% of those whose company failed.

Quarterly reporting for the self employed

The Chancellors recent announcement revealed a little more about the new Digital Tax Account. It looks as if the self-employed will need to report their figures and pay tax quarterly.

More details will be revealed early next year but this could force most self employed on to the cash accounting rules. This is a simplified option for self employed to complete their tax return where tax is paid on the difference between Money In and Money Out with the option of flat rate expenses.

If a self employed person doesn’t opt for cash accounting they will need to complete full business accounts using standard accounting rules.

The key will be using software to make life easier and Sackmans will be keeping a close eye on developments.