Robert Zarywacz thinks businesses who maintain their marketing will thrive

A double-dip recession would be far more interesting for the media than a sustained recovery.

This was evident on the day when the Office of National Statistics published the third quarter 2010 UK GDP figures. Many commentators had been almost rubbing their hands with glee as they predicted 0.4% growth, only to retract their words when the actual growth was double their predictions at 0.8%.

Success is 50% sentiment . . .
Unfortunately, sentiment is very powerful and can raise or reduce confidence very fast. While government cuts will inevitably mean a tough 2011, it would be very easy to talk ourselves back into recession unnecessarily.

Conversely, we could just as easily talk ourselves into recovery.

There is no logic to fickle confidence.

. . . and 50% hard work
But, as everyone in business knows, talk doesn’t run a business: hard work is needed for that.

And marketing is one area which needs to work hard for any business wanting not just to survive, but to thrive. It also tends to be one of the first activities to be cut when businesses need to reduce costs.

While cutting unnecessary costs and improving efficiency are desirable, this does not have to be at the expense of marketing, which is the fuel powering the engine of a business. There are many actions a business can take at little or no cost to keep its marketing effective.

Essential actions
> Is your marketing material current? It should be easy to update your web site, especially if you use a content management system to add or change text yourself.

> Are you using public relations? It can be as easy as picking up the phone to interest a journalist when you have a good story to tell.

> Are you publicising your successes? Many businesses sit on material that could make powerful case studies.

> Are you using social media effectively? Just changing your status once a day on LinkedIn or facebook or posting five tweets a day on twitter can help keep you in front of your customers.

Keep on marketing
Whether you have a budget to buy professional services or you manage your own marketing, this is just a small sample of many marketing activities that can generate more business.

BUSINESS ACTION
> Keep your web site up to date.
> Contact the media with interesting ideas for stories.
> Publicise your successes.
> Use social media little and often.
> Follow NDBA members on twitter, facebook and LinkedIn.

Robert Zarywacz
t: 01271 879100
e: rob@z2z.com
w: z2z.com
twitter: @robertz

Business adviser and accountant James Hellyer looks at how to keep your business in shape

Speaking to a lot of people in the North Devon business community, I have noticed a general attitude of optimism concerning the year ahead. However, there are many reasons why 2011 might herald an even harsher economic climate for the region.

The South West is more reliant than much of the country on state sector jobs. Some of these jobs may well go as part of the comprehensive spending review. That will impact on secondary spend, as those made unemployed suddenly don't have disposable incomes to spend in local shops, pubs and restaurants. Add to this the imminent increase in the rate of VAT and there's a potential double whammy waiting to hit North Devon business.

So what can you do to prepare your business for tough times ahead?

Well, now is the time to have a business and tax health check.

Business health check
There are some things every business should know about itself. Many don't because they are too busy working in the business to work on their business.

Ask yourself these questions:

> Do you know how much you have to sell each week or month in order just to break even (ie to cover your costs)? Identifying the required sales volume should be the first thing you do. > Do you know what your gross profit margin is? If it's too low, you may not cover your overheads, and even if you increase unit sales, you may just be working harder to continue making a loss.

> Do you know whether all of your product lines are profitable? Perhaps you should find out and stop selling products that don’t make you money.

> Are your prices right? One of the easiest ways to make more money is to increase your prices. Can you get the formula right so you can sell for more, but not lose customers?

Tax health check
When times are hard for your business, there are many steps you can take to accelerate tax relief or even to get HM Revenue to put cash into your bank account.

Have you discussed any of the following with your accountant?

> If your business is a sole trader or partnership with a year-end other than 5 April or 31 March, it may have early year's profits (called 'overlap profits') that have been taxed twice. Normally, you get relief for this when the business stops trading. But wouldn't you rather have that relief now? You can if you change your year-end.

> If your profits have dropped in the last year, whether due to difficult trading conditions or even capital investment, then you might be eligible for tax credits. Hundreds of millions of pounds to which people are entitled go unclaimed each year. Some of them could be yours.

> If your business has made losses, you could change its year-end to make sure you receive any tax refund due to you sooner rather than later.

> Are you claiming all the reliefs you are entitled to? For example, if your business has spent money developing or improving products or services over the last year or more, then it may be entitled to enhanced tax credits. These can cut your tax bill and even generate a refund for businesses in their early years when you have yet to pay tax.

> Have you considered the tax allowances available for plant and machinery purchases? If you were planning on buying something next year, purchasing it now, under some circumstances, could get you tax relief a whole year early.

> Have you bought commercial property or are you thinking of buying some? Again, careful planning could maximise the amount of the property that's eligible for tax relief. This is just a small sample of the topics you could be discussing with your accountant right now to ensure that your business is in the best trading and tax position possible when things begin to bite.

BUSINESS ACTION
> Identify how much you need to sell to break even.
> Ensure your profit margin is right.
> Set your prices at the right level.
> Make sure you claim all tax reliefs and tax credits.
> Consider changing your year-end to receive tax refunds sooner.

James Hellyer
t: 07736 686676
e: james_hellyer@accountant.com
twitter: @james_hellyer
Free initial business and tax health check