Tag: independent gym

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Finance Function Gym

How much does accounting cost for gym owners?

How much does accounting cost for gym owners?

This must be the most common question I am asked and let’s be honest we all expect that answer to be available at the click of a button nowadays. However, I will liken it to when you got a price for your gym fit out, you did not receive an out of the box price, as every gym is unique, and every gym owners’ vision and dreams are different. The price would have been dependent on the size of your space, the type of equipment you wanted, what services and experiences you wanted your members to enjoy.

I realise that not having prices on my website could make you think I am hiding something and fill you with anxiety about jumping on a call with me, it might even distract you during the call as you are waiting for price at the end. So even though I cannot give you a price, as my fees are tailored to each individual business and their needs, I wanted to talk you through the process and give you an understanding of how I price.

Firstly, I just wanted to advise that I only work with businesses who either use Xero or are prepared to move across to Xero. This is for your benefit, as it means you can seamlessly access your finances, no matter where you are. It can be accessed via any device, enabling you to check your bank, pay invoices and use the app to take pictures of receipts on the go, saving you time. 

The investment in moving your accounts to me will be dependent on a few things:

·       To start there is a minimum monthly fee of £100 and this is for the smallest of businesses and minimal service level. This is because under this level of investment I would not be able to provide the level of service you need, to have up-to-date accounts and information for you to make informed decisions. 

·       Turnover level/size of business, this because the bigger the business the more work I need to do.

·       Number of transactions and how frequently you require the bookkeeping to be updated (weekly or monthly). This is due to the level of work involved. 

·       Number of employees on payroll. Does that mean if you get an additional employee that the cost would go up? Yep, the price will increase, just as I would expect you to charge for additional services.

·       Whether you have an in-house finance team or bookkeeper maintaining the records or whether you would like me to complete the bookkeeping. Bookkeeping is a highly skilled role, which takes years to learn and requires continuous development. Therefore, when you invest your bookkeeping with me, the actual fees you pay are lower than a business who needs constant checks. 

·       Frequency of management reports and forecasts, due to the level of work involved every month or quarter to review the information and produce advice. 

·       Requirement for cash forecasts and management of cash forecasts, some businesses have an annual cash forecast, whilst others upgrade the service to include a regular review and adjustment with me. This requires a greater investment of preparation and review. 

·       Strategic advice and 12 monthly goals/business plan, this is a service that provides a greater level of business support, with the business owner working with me to establish their goals and create a plan which is monitored. 

·       I offer a “quick query” service which means you don’t need to worry about asking me those little questions you have, you can ask me quick (10 min) questions without incurring any additional charges, this service is included free as standard. 

You pay Xero and invite me in, Hubdoc is part of the Xero subscription so you will receive access to that for free. As mentioned above I only work with Xero as it works so well for businesses and gym owners. Xero allows you to seamlessly access your finances, no matter where you are. It can be accessed via any device, enabling you to check your bank, pay invoices and use the app to take pictures of receipts on the go, saving you time. 

Any additional work which takes longer than 10 minutes or requires additional research will be chargeable, this will always be discussed beforehand and added to the service agreement and priced accordingly, but don’t worry I will not commence any work without discussing with you beforehand.  No surprise bills!

If you sign up part way through the year, this will create an alignment fee which is payable at the start or can be spread over 3 months. This is because the annual fee is spread across 12 months and if you join after say 7 months, certain elements such as annual accounts fees will need to be caught up. After that going forward the annual amount will be spread across 12 months and charged as a direct debit, as I found that business owners prefer to spread the cost evenly across the year, so they can budget and manage their cash. There is no large bill at the end of the year to pay. 

Any examples of price then?

So you are still none the wiser about cost! Well, I can provide some examples which will help this.

Gym requiring accountancy work (all prices are per month)

Turnover of £500k per annum, payroll for 5 employees, VAT return submitted quarterly, annual accounts, tax and confirmations statement submitted, 1 directors tax return and 200 transactions a month to be reconciled (by me):

This would be £468pm 

If you wanted to add a quarterly zoom meeting it would be £37pm and a set of quarterly management accounts would be £92 per month. 

Larger gym requiring finance director support: (all prices are per month)

Turning over £1m per annum, all bookkeeping and compliance work (accounts, tax, VAT, payroll) is handled by an in-house bookkeeper and an external compliance accountant. The business owner wants to grow the business and make more profit, ultimately to be able to take more cash from the business and take the family on holiday. They are looking for a part-time finance director as they don’t need and cannot afford a full time finance director. 

I will provide monthly management accounts, an annual cash forecast and monthly management meetings which involves going through the accounts, providing advice and answering any questions the business owner has. Together we will look where improvements can be made, costs saved and profit increased.

This level of support would require an investment of £615pm 

As your business changes the level of service you require will change, so I wanted to outline the frequency with which we review the service levels:

1)  Payroll and software fees are reviewed every month

2)  Bookkeeping every quarter

3)  Account fees annually, providing you with an update 3 months prior to the year end.

4)  I have the option to increase fees annually by up to 5% to account for inflation.

 

The monthly invoices are updated going forward to reflect any changes, this will be discussed with you before hand.

There is no need to worry about direct debits being taken without prior notice. 

Monthly invoices are sent on the 1st of each month, which are payable by direct debit. This is set-up, so you don’t need to worry, GoCardless will process the payment on 15th of month. It doesn’t require any input from you and will be the same amount every month as agreed in the proposal (unless there is an agreed adjustment due to a review). 

It is impossible to calculate a price without speaking to you, finding out what help and support you need, what support you already have and how frequently you want certain services. That is why we have the initial discovery call to decide if we are both a good fit and then a second call to go through the services, frequency etc to calculate the price.

As a business owner it’s critical to look at your accountancy fees as an investment rather than a cost. 

An accountant is someone who can help your business progress, help you increase your profits and reduce your stress, giving you back time to do what you want. By investing in an accountant you are giving yourself a chance to experience this, a cheap once a year accountant won’t be able to provide that. 

To understand what your price would be, contact me for an initial 15 minute free discovery call and if you decide to move to a proposal then I will provide the price. 

 

I will provide you with a proposal which clearly outlines the price and services included, as well as the additional services you may wish to consider in the future as your business grows.

 
 
 
 
Categories
Business tips Gym

You use Xero in your gym business, so do you really need an accountant?

Do you really need an accountant for your gym business if you use Xero?

So, you have cloud accounting software in your gym business, your bank (or gym management software) feeds into the accounting software and the software makes suggestions for where to reconcile the bank. Therefore you feel like an accountant is a waste of money and confused about what they can offer to your business. 

Masses of information is available online via websites such as Xero guides and HMRC website, if you have the time, you think you can do it yourself. Why would you need an accountant then?

It is a fair question as when you are starting out, you will be looking to save money. Plus, you assume the software does all the work, so what is the accountant actually doing? Seeing the value might be a lot harder than seeing the value in a Facebook ad campaign or purchasing a new piece of equipment to dazzle the members.

If you ask other gym owners if you should have an accountant you will get a mixed bag of “No, it is easy, just a few clicks of a button” and “Yes, my accountant saved me hundreds in tax alone”.

So, as an accountant, I wanted to go through the reasons why your accounting software does not do everything you think it will and reasons why Xero alone is not the solution for you.

Why your gym business needs an accountant:

1.    Risk – you don’t know what you don’t know. Taxes are complicated and sometimes can appear a bit grey, so it takes years of learning and maintaining to do this well. Your mistakes are likely to be costly.

2.    Time – How much is your time worth to your business? For every hour that you are working on your accounts, you are not working on your business. 

3.    Stress – Do you enjoy keeping the accounts up to date and then worrying that you haven’t done it right? You may spend an hour a week completing the accounts but then spend an additional hour worrying that it isn’t quite right.

4.    Complication – Accountancy is still complex, whilst the software is always learning, it can learn the incorrect thing if you make a mistake. This can be complicated and costly to unravel. 

5.    Strategic advice – the accountant will be able to provide strategic advice on your future goals and identify opportunities to make more profit. Often when you are too close to the business it is difficult to see.

6.    Tax planning – with tax most of the benefits come from forward planning – how to extract funds from the business, how to reduce your tax bill, how to plan for the future with pensions and inheritance tax. It is impossible for you to do this, as you don’t know what you don’t know.

7.    Cost – an accountant is unlikely to sign off accounts that they have not prepared, so if you would like an accountant to submit your accounts, they will charge for the checking of the information.

I know an experienced gym owner who completed their own accounts and assumed as they had used an accounting system and that accounting system had suggested the entries that it was correct. When I questioned what stock they had, (as there were thousands of pounds on the balance sheet), they didn’t know how to respond, they said all they had was a few protein bars. The accounting system had made an assumption and the owner had agreed that assumption, it continued to make the same mistake. This led to a smaller loss being claimed than should have been.  

Reasons why you think you don’t need an accountant for your gym business:

·       Small gym – You have very basic transactions, only a few members and your bank feeds directly into your accounting system. Due to low member numbers you have the time to prepare the accounts with the help of the software guides. But even at low levels you can still make mistakes, do you know the difference between depreciation and capital allowances? Why does it matter where you code that drink you gave away to a member? 

·       Accounting background – you have either had some accounting training or held a junior accounting job – so you understand the basics of accounts. This will help you in the short term but did you really start your gym business to do accounts? Or did you start it for your love of fitness, weight lifting and helping people live longer lives?

·       New business – this will mean you don’t have the complications of inputting opening balances into the accounting system, uploading suppliers and client details. However, do you know how to set up the chart of accounts to capture the costs in the right place? Have you considered if going VAT registered could be beneficial to you? Getting the right foundations from the start will mean less stress and time wasted as you grow. 

·       Gym management software – your gym uses gym management software so you won’t need to register all your clients into your accounting software. You will still need to ensure the transactions are coded correctly in the accounting system. I took over the accounts for one business that wasn’t correctly accounting for VAT as they didn’t separate out the products/services at 20% from those at 5%. 

·       Below VAT threshold – you do not have the added complication of VAT rules and what VAT percentage you should be charging on the different products/services you offer. Registering for VAT is not a bad thing, it shows your business is growing, plus it may be beneficial to register for VAT even if you haven’t hit the threshold. Think of the 20% tax you pay on all that fancy equipment. 

·       Online help – Xero provides help guides and videos and HMRC have a whole host of information you can use. If you have the time to learn, then this could be a way of bootstrapping at the start. But bear in mind that Xero is not a person who is looking at your particular situation. They are leaving the decisions up to you. 

·       MTD – Xero is set-up for making tax digital and shows you a VAT report. VAT payments and refunds can be automated. However, as I mentioned above, mistakes can still be made. Xero will show you the VAT report with the information you have entered, but if that is not correct the VAT report will never be correct. 

·       Risk – You may pick the wrong accountant. Deciding which accountant to work with is a serious decision, that I know you won’t take lightly. It is important to speak to the accountant and see if you speak the “same language”, that you feel comfortable with them and that they have experience to help you. 

Here is why your gym business needs an accountant:

Not using an accountant can be likened to novice gym members going to your gym for the first time. They can work out the running machine on their own, they can copy the person before them, they can try to read the instructions provided. But unless they have an induction and on-going support they will not be able to do much more than that, at least not safely. 

There are lots of things they don’t know, so they attend their induction and your team offers advice and guidance during the day. The member may then pay for PT sessions to help build a plan and learn techniques. Sure, they could watch you-tube videos until the early hours and work out how to do it themselves, but they will probably never quite reach their goals. Their lifting technique will never be quite right as it’s hard to judge yourself.

For these reasons I recommend that you take a practical approach to your gym accounts:  do what you have TIME to do BEST and pay someone to do the REST.  If money is tight and time is plenty, then do more of the bookkeeping yourself.  Once your business reaches the point where your time is more profitably spent doing something (anything) other than bookkeeping then delegate that aspect as well.

 

Here are a few blogs that you can use now to start making decisions for your gym business:

Should you voluntarily register for VAT? https://debbiebaileymoney.co.uk//should-you-voluntarily-register-for-vat-for-your-fitness-center-gym/

 

5 common accounting mistakes that gym businesses make: https://debbiebaileymoney.co.uk//5-common-accounting-mistakes-that-could-hurt-your-gym-business/

 

7 signs that your business is leaking profit: https://debbiebaileymoney.co.uk//7-signs-that-your-business-is-leaking-profit/

 

A list of 32 ways to get value out of your business: https://debbiebaileymoney.co.uk//32-ways-to-maximise-extracting-value-from-your-business/

Categories
Business tips Cash Finance Function Gym

5 common accounting mistakes that could hurt your gym business

5 common accounting mistakes that could hurt your gym business

Many gym and fitness centre owners – especially those just starting out – tend to handle their own accounting and bookkeeping. However, keeping track of the finance-side of the business– everything from income to expenses to tax compliance– can be overwhelming.

Mistakes can happen quite easily and can have costly consequences to your business, especially as the business grows. Below are five of the most common DIY accounting errors that you should avoid.

Unorganised Records

It takes excellent organisation skills to be able to do your bookkeeping and accounting right. You would need to keep a record of every transaction, keep receipts or digitise them for future reference, calculate taxes accurately, and more. If your records are not kept organised and updated, it is highly likely that you’ll miss something out, which could get you into trouble during the tax season.

To help with this using an accounting system such as Xero is really the way forward. You can access your records anywhere, you can connect it to your gym management software or upload CSV files to Xero, this will give you up-to-date information. Plus it means when you do seek support from an accountant/virtual finance department you will not be restricted by location.

No Accounting Schedule

As a business owner, there are surely a lot of other things that you need to attend to and accounting can easily be pushed to the bottom of your seemingly endless To-Do list. Yet, it is extremely important to set an accounting schedule to add your recent income and expenses into your records. If daily updating is not possible, at least dedicate some time once a week to do your accounting.

Unreconciled Accounts

Regularly check if your bank account reflects the same balance as you record your cash flow and other financial data into your books. If you find a gap, there is likely a mistake somewhere that you need to find or even a fraudulent transaction. Taking immediate action will help you prevent worse problems further down the line. Even if you use bank feeds into your accounting software, it is not guaranteed that transactions will not drop out or duplicate. So by checking your bank balance regularly against your accounting system you can feel comfort in knowing everything is being correctly captured.

Failing to Take Into Account Small Transactions

It can be easy to forget about minor transactions such as the office supplies that you picked up on your way to the office or the freebie that you sent a loyal customer. However, no matter how small you think the transaction is, it’s important to keep a record and get a receipt. In case of a tax audit, you will need to be able to present records of ALL business expenses, even these small ones. This is why I would recommend using a tool such as Hubdoc, Xero expenses or receipt bank, you can then quickly take a photo of the receipt, upload it and not have to worry about losing the receipt.

Not Backing Up Data and Using an Accounting Software

Imagine if the laptop where you store all your financial data was stolen, lost, or broken beyond repair and you don’t have a back up. You would need to redo everything from scratch, which could be a huge waste of time.

If you’re still using a spreadsheet or paper ledger to keep track of your business finances, you might want to consider upgrading into a cloud-based accounting software such as Xero. By migrating to the cloud, you will be able to easily back up your accounting data and even access them wherever and whenever you need to.

These cloud-based accounting systems also integrate well with your bank account and other powerful business apps. The results are streamlined processes, less manual work, enhanced efficiencies, and better overall business performance.

Spend Less Time on Your Books and More Time on Your Business

While being aware of these common accounting mistakes could help you avoid them, the most convenient and efficient approach to stay on top of your business finances is still to entrust your accounting to the experts. Our team of experienced accountants can integrate the most suitable cloud accounting software for your business and even train your in-house staff on its proper implementation.

Let us take charge of your books, while you focus on growing your business. Get in touch with us today.

 

 

1. Book a call with me: https://debbiebaileymoney.co.uk//contact-us/ 

2. Download our free guide on “7 mistakes to avoid – to stop your fitness business running out of cash” https://debbiebaileymoney.co.uk//fitness-ebook/ 

3. Connect with me on social media: 

Categories
Business tips Finance Function Gym Tax

Should you voluntarily register for VAT for your fitness center/gym?

Should you voluntarily register your fitness center / gym for VAT?

You are considering starting up a new fitness facility and the outgoings are racking up fast. You need to purchase the equipment up front, sign leases, pay consultants for gym design/layout etc, most of these businesses are likely to be VAT registered. You are currently not trading and therefore haven’t even considered being VAT registered.

But is there a case for voluntary registration prior to getting to the £85,000 compulsory limit? In other words, registering for VAT when you don’t actually have to? Seems a bit crazy but there may be good reasons for considering this and it all depends on individual circumstances.

Registering for VAT

You must register for VAT once your turnover passes £85,000 or at the point during the year when you expect your VAT taxable turnover to be more than £85,000 in the next 30 days.

Once you’ve registered, you must, charge VAT on top of your goods and services to the end users. In most cases this will be 20% (i.e. on gym memberships) but there will be some products which are rated at 5% VAT and others which are zero rated (i.e. frozen meals to be heated and eaten at home). In most cases however, it’s fair to say that you will have to charge 20% VAT on (almost everything).

When you sell something, you collect the 20% VAT you charge customers – this is your output VAT. The VAT you pay on your supplies is your input VAT. At the end of the VAT period, you add up all your output VAT, subtract the total input VAT you’ve paid and then you either pay HMRC the difference or they pay you it.

When you sell to the public (aka gym members), they will not be able to claim VAT back and all they’ll really see is that you’ve put your prices up by 20%.

So, in addition to the extra paperwork that being VAT registered involves, there are serious business considerations to think about too. So, what are the pros and cons?

Advantages of registering for VAT

Deciding whether to register for VAT voluntarily before the registration threshold is reach is a  big decision. It is vital therefore, that the matter is given careful consideration. There are several positive reasons supporting voluntary registration, including:

  • The number one reason we will consider in this article is that you can claim VAT on certain items that you purchased prior to the date of VAT registration. Talk to your accountant about the exact details.
  • If you are in a VAT reclaim situation then you will definitely be better off.
  • You’ll appear to be a bigger business if you’re charging VAT, as the current limit for compulsory registration is £85,000 on VATable turnover (2020/21).
  • Maintaining up to date records will provide better information for running your business.

Here’s an example of how being VAT registered can help:

Sandra is starting a new gym and has on order £120,000 (£100,000 + 20% VAT) of strength and cardio equipment. Being a non-VAT registered business, Sandra will have to accept this amount as a full cost to the business and set this against her business profits for corporation tax. However, if the business was VAT registered, Sandra would claim the output VAT (£20,000) back from HMRC, as she is still in start-up mode and hasn’t received any income yet. This would be a saving of £20,000 cash and give Sandra a better cash position. 

Disadvantages of registering for VAT

As we mentioned earlier, registering for VAT could put you at a price disadvantage over non-VAT-registered competitors because you have to add 20% to everything you sell. There is more paperwork and administration involved too.

  • There can be increased admin and bookkeeping costs.
  • If your customers are not VAT registered themselves then you will immediately appear 20% more expensive when you add VAT onto your price.

·       You will also have to make VAT payments to HMRC once a quarter/month/year if your input VAT is lower than your output VAT. This will need to be factored into your cashflow forecasting.

·       You could end up paying penalties if you do not file and pay the VAT on time. HMRC give you a month and seven days to file your VAT and pay anything you owe over.

VAT Is non-registration preferable?

VAT registered businesses supplying goods and services to private individuals often feel dis-advantaged compared with their non-registered counterparts because they have to charge an additional 20% to their members. 

 

It is important to consider your business plans and forecasts, if you believe you will be above the VAT threshold in the near future then it may be worth registering early to reclaim your output VAT (VAT on supplies). You will also want to set your price at the start and not have to suddenly increase it by 20%. 

 

Purchases made before registration
There is a time limit for backdating claims for VAT before registration. From your date of registration the time limit is:

·       4 years for goods you still have, or that were used to make other goods you still have

·       6 months for services

 

You can only reclaim VAT on purchases for the business now registered for VAT. They must relate to your “business purpose”. This means they must relate to VAT taxable goods or services that you supply. As a gym your taxable service is gym membership, so you will be able to re-claim VAT on items such as gym equipment, flooring, advertisement etc. 

 

In summary, every gym owner will need to consider their own circumstances and future plans before deciding if to voluntarily register for VAT. If you would like more help in deciding if to register then please contact me to discuss. 

 

 

  1. Book a call with me: https://debbiebaileymoney.co.uk//contact-us/ 

2. Download our free guide on “7 mistakes to avoid – to stop your fitness business running out of cash” https://debbiebaileymoney.co.uk//fitness-ebook/ 

3. Connect with me on social media: 

Categories
Business tips Finance Function Gym

Why is our tax service different and how does this benefit you?

Why our tax service is different and how does it benefit you?

There are 3 ways that we deliver over tax service to you as a client. 

The 1st is vitally important, its tax compliance, its how we help you account for the tax
that is due and therefore we help you fulfil your compliance obligations and
give you peace of mind. It’s box ticked, brilliant, that’s really important and
a key part of the service we offer to you.

However, what we really like to do as an accountancy firm is to focus on two additional areas, that in the market place don’t tend to get delivered in a consistent way to clients. What we are about as a business is delivering services in a consistent
and optimized way to clients.

So the way that we do that with tax services, is that as well as offering tax compliance we also deliver tax advice and tax consultancy to you.

Tax advice is delivered to you in a singular area of tax where we will charge you a fee
and you will usually benefit to a greater degree from the work that is delivered
via tax savings that will dwarf the fee that is charged in that area.

We are usually able to spot that piece of tax advice really in 1 of 3 ways.

ONE: you come to us and tell us you are doing something, sometimes if we leave it to
that point, it can be too late for us to do anything, because maybe you have already done it, or taken it too far and we cannot do some planning that can help you better your position.

Two: sometimes the nature of the area is that we can do a surface level spot. In other words, if you are a new start up fitness center and incurring large equipment costs and you walk into my office, I would say to you, you should look at getting VAT registered. It is a surface level spot.

The reality with tax advice though is that there are over 1000 tax reliefs, incentives, allowances and planning opportunities, that can apply to any client and we cannot leave delivery of these services to just surface level spots. 

So instead of waiting for you to come to us, we need proactively get on the front foot
with you and consult with you on the areas that could apply to you, as you move through your evolution as a business. And the way we do that is with tax consultancy, where we get under the skin of your business and really understand what the tax reliefs, allowances, incentives and planning opportunities are that at this point in your evolution specifically apply to you.

 

So (a) you are fully aware of what those areas and (b) we give you the full opportunity at implementing those areas with us. At every different point we will come to you and suggest to you an appropriate level of service and that level of service will be contingent on what you need. It will always comprise of the different tax areas; always tax compliance, often tax advice that we can initially identify you will need and we provide a level of tax consultancy that you need proportionate to where your business is up to.

If you think of your business as an iceberg, tax compliance is the tip, tax advice is the bit above the water (surface level) and tax consultancy is the majority of your business below the water. How we help you the most is by tailoring the package we offer to you with these three things in mind.

 

So how do we deliver to you as a client the different tax
consultancy levels I will go through this in the next article. (To be released shortly).

Until then take a look at the 32 ways you can extract value from you business: https://debbiebaileymoney.co.uk//32-ways-to-maximise-extracting-value-from-your-business/

Here is an example of how the tax consultancy service could benefit you: https://debbiebaileymoney.co.uk//prime-example-of-maximising-extracting-value/

 

2. Download our free guide on “7 mistakes to avoid – to stop your fitness business running out of cash” https://debbiebaileymoney.co.uk//fitness-ebook/ 

3. Connect with me on social media: 

Categories
Business tips Finance Function Gym

Independent Gyms Partnership

lady with weights

Independent Gyms Partnership announcement

The wait is finally over – we’re really excited to let you all know that the brand new Independent Gyms Platform is live!
Head over to www.independentgyms.co.uk for a closer look. There are some great features on the platform from downloadable documents, to preferred partners with discounts, to events/workshops and webinars, to a variety of giveaways and goodies.

Southbourne Accountancy is pleased to have been asked to feature as a partner on the Independent Gyms website, thanks to referrals from current clients. The web page is here (though you do need access, so sign up – it is free in January). https://independentgyms.co.uk/brands/accounting-insurance/

Independent Gyms was created to support independent fitness facilities across the UK and Ireland to grow. They want to make a difference to their members’ business and lives and in doing so improve the industry as a whole for gyms and the end consumer.

We really believe this platform will make this a huge benefit for independents across the UK and it will only get better as we move forward.
There are 3 membership tiers: with a free Basic Membership, an accessibly priced Standard Membership and a Premium Membership (that will come in to it’s own once Covid restrictions are eased).
Given the particularly tough time the industry is going through right now, Independent Gyms have opened this up so all gym owners get their FIRST MONTH FREE when they become a member in January.

It is worth signing up for the free month and looking at what is on offer. 

Also, do not forget to sign up for to be featured on the single biggest map of independently owned fitness facilities in the UK. 

Starting January the Independent Gyms membership will start to run free bitesize webinars for independent gym owners, with the support of their partners.

The sessions cover all aspects of running a fitness business, ranging from remote fitness training with Myzone, cash management with Southbourne Accountancy, to customer Retention with GG FIT. All with the aim of helping independents run their businesses more effectively.
Gym owners can find out more and book on to the webinars via our new platform https://lnkd.in/eKi3pWG

I decided to partner with Independent Gyms as they provide a supportive and inclusive environment to help independent fitness owners. I personally enjoy working with gyms and fitness facilities as I strongly believe in the benefits of exercise to our physical and mental health. I have been on a long journey myself with fitness and have enjoyed learning over the years different types of fitness. By working with business owners who have the same passion as me, we can work together well to understand the pains the business owner is experiencing and how these can be resolved. 

Let me know what you think, I am very excited for 2021 and what this collaboration could mean for us all. 

 

2. Download our free guide on “7 mistakes to avoid – to stop your fitness business running out of cash” https://debbiebaileymoney.co.uk//fitness-ebook/ 

3. Connect with me on social media: 

Categories
Cash Finance Function Gym

7 signs that your business is leaking profit

7 signs that your business is leaking profit

.....and you need to hire an accountant

7 signs that your business is leaking profits and you need to hire an accountant.  

Accountants play an important role at various stages of the growth of your business. They can handle much more than just your payroll and tax returns. So, when should you consider hiring an accountant for your small business? 

Once you decide to start a small business of your own, you have to ensure all of its financial records are accurate. Unfortunately, being too frugal by trying to sort out your small business’s finances might most likely prove to be a costly mistake later and cause you to close shop. 

So you should observe if your business already exhibits these seven signs that it needs expert help now: Top 7 things to outsource now 

1) You are neglecting core business activities. 

At the start of a business you will probably “bootstrap” it, wearing every hat in the business to keep costs down. However, you need to question your ability and what your time is worth. If you value your time at £150 per hour and it takes you 10 hours a month to complete your accounts, that is £1,500 a month you are spending on completing the accounts.  

It is likely that an accountant may cost less than this and produce a more reliable result. Also, you can then use that time saved to go and generate £1,500 of revenue or more! You will be more focussed on the core revenue generating business rather than distracted with the accounts.  

This sort of simple calculation might be a sign that the cost of hiring an accountant is well worth it. 

You could consider outsourcing other tasks too such as marketing, your website, whatever you are not an expert at. For further ideas check out this blog on 8 things to outsource in your business:  

2) Your business is experiencing rapid growth 

Your business is growing, customers numbers are increasing steadily but do you have the right foundations for growth? At the beginning it makes financial sense to do everything yourself but as the business grows, things start to slip through the net, now is the time to seek outside help. 

More customers, more sales equals more paperwork and number crunching. It is helpful to have someone on board whose sole focus is on keeping the finances accurate but also keeping a track of your current growth and providing professional insight for growth in the future.  

Here is a blog on successfully growing your business: Successful growth 

3) You are not taking the salary/rewards you were expecting 

Are your currently taking a salary from the business? On top of that are you taking dividends – your reward for all the hard work and risks you have taken in building your own business. If not, is this because you are not making enough profit or is it because you don’t know your cash position and are unsure if you can afford to take money from the business?  

Most businesses fail due to poor cash management, so now is the time to concentrate on your cash position. You will need to look at the future ups and downs so you can make smart decisions with regards to your business. Look at this blog: Importance of Statement of Cash flow 

4) Not getting the right financial information 

Can you trust your data? You may have an accounting system in place but is it providing accurate, up-to-date information that you can make sound business decisions on? Are you able to use the data for scenario planning (what-if x happens), to help you decide if to take on that extra member of staff? 

You may also want to measure key business metrics, such as the ratio of salaries and other employee payments to total revenue. An accountant can help here by managing your payroll and producing graphs so you can see how the ratio changes over time. 

A blog on why a virtual finance director can help your business: What is a VFD and how it can one help you? 

5) Revenue is on the up, but profits are not 

You have worked hard, sales are streaming in, but you are still not making a profit. This is can be common in business as owners are so excited about making a sale, they accept any price with whatever terms and conditions the customers want. If you do not have an agreed progress for pricing a product or service, you are susceptible to this. It is more likely that you will be negotiated down and devalue your service/product.  

It is important to look at the lifetime value of a customer and take action with those customers that are in real terms costing you more than they are making you.  

6) You need to raise money 

If your business is at a point where you’re looking for loans or investors, your company’s financial history will be a key portion of the loan application or investor proposal. 
 

You’ll want reports and financial forecasting that are professional and provide all of the relevant information, and an accountant can ensure you’re not missing any critical pieces or parts. 

7) You’ll need advice when you write a business plan 

Do you have a business plan or is in hidden away in a drawer never to be seen again? An accountant will help you to make the most of a business, looking at real numbers which you can track you process against. A business plan will give you focus and direction for the business.  

Hiring a professional at this early stage will mean you get the benefit of their financial knowledge and advice right from the start. That could save you time and money compared with hiring one later. 

Make your business a success 

The truth is tapping into the expertise offered by a financial professional might be one of the most effective decisions you could make for your company. Your accountant can provide recommendations that will propel your business efforts forward and help you reach higher levels of success. 

We charge on a monthly basis and whether you take you seek help now or after the year end, the cost will largely be the same. However, by investing at the start, we will be able to ensure you are accounting correctly, have valuable information on a monthly basis, have monthly support, and ensure that you are operating in the most efficient way. Whereas if you hire an accountant after the date, they will be not able to help you make tax efficient decisions and if they need to fix past mistakes, it will cost more to correct these.  

 

Accountants can help you every step of the way 

As you can see, accountants can help you out during every stage of your company’s development. That doesn’t mean you have to hire one, but the right accountant should make life easier for you, so you can concentrate on what you love doing. 

Your speciality is running your business. Leave the financial detail to an accountant. A Virtual Finance Director is particularly suited to forward-thinking start-ups and established businesses where financial expertise is the best way to assist its continued growth. 

Is the time right you for to get an accountant and get focussed on your business? Book a discovery call today and find out how Southbourne Accountancy & Business Services can help you. Our service ranges from monthly or quarterly board views to management reports, our aim is to match the level of support with your business needs. This support can be flexed as an when needed. 

 

2. Download our free guide on “7 mistakes to fix, to stop your fitness business running out of cash” https://debbiebaileymoney.co.uk//fitness-ebook/ 

3. Download the “32 ways to extract cash from your business” Here 

4. Connect with me on social media: 

 

 

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Business tips Cash Finance Function

Trivial Benefits – what are they?

business journey

What are trivial benefits? Should you care?

What are trivial Benefits?

Trivial benefits are best described as small ‘token gifts’, given by management to their employees. This can come in any shape or form but generally speaking, they are typified by gestures such as bottles of wine, chocolates, beer for the office, or team lunches. Essentially little everyday sweeteners that keep the morale of the company up.

Tax on trivial benefits

 

A benefit can be “trivial” and mean you don’t have to pay tax on the benefit for your employee if all of the following apply:

·     it cost you £50 or less to provide

·     it isn’t cash or a cash voucher

·     it isn’t a reward for their work or performance

·     it isn’t in the terms of their contract

You don’t need to pay tax or National Insurance or let HM Revenue and Customs (HMRC) know.

You have to pay tax on any benefits that don’t meet all these criteria.

Salary sacrifice arrangements 

If you provide trivial benefits as part of a salary sacrifice arrangement they won’t be exempt. You’ll need to report on form P11D whichever amount is higher:

·     the salary given up

·     how much you paid for the trivial benefits

What kind of trivial benefit can be provided?

The benefits can include anything except for cash or vouchers that can be redeemed for cash. Examples of benefits provided by clients include:-

  1. Christmas Turkey
  2. Tickets for the theatre/sporting events
  3. A tennis lesson
  4. Retail gift vouchers

Is there a limit on the amount of trivial benefits?

For employees there are no limits to the number of times they can receive a trivial benefit in the tax year.

However for Directors of ‘close’ companies

You can’t receive trivial benefits worth more than £300 in a tax year if you’re the director of a ‘close’ company.

A close company is a limited company that’s run by 5 or fewer shareholders.

The key distinction when defining trivial benefits is that they are not intended to add financial value to an employee’s pay-check. Nor can they be given in lieu of payment. They are trivial in the traditional sense of the word; having little actual value. 

 

4 facts about Trivial Benefits:

1. Price cap

You must bear in mind that any ‘gift’ given as a trivial benefit cannot have cost you more than £50. This is irrespective of how much has been paid for it but rather its market value.

 

2. Non-cash

It has to be a material offering, you cannot simply hand someone a crisp fifty. This also includes any voucher that can be redeemed for cash. This is just too close to being a form of payment and so as a blanket rule, all cash gifts must be recorded and incorporated into the tax.

 

3. It is not a bonus

It cannot replace a bonus. So if someone’s landed you a contract and you give them a voucher, that isn’t a trivial benefit.

 

4.      It is not in their contract

Trivial benefits have to be one-offs or random acts of kindness. There cannot be a formal agreement between employee and employer about their supply and frequency. Again this resembles a type of payment.

 

 

1. Book a call with me: https://debbiebaileymoney.co.uk//contact-us/ 

2. Download our free guide on “7 mistakes to avoid – to stop your fitness business running out of cash” https://debbiebaileymoney.co.uk//fitness-ebook/ 

3. Connect with me on social media: 

https://www.linkedin.com/in/southbourneaccountancy/ 

https://www.facebook.com/debbie.hancockSA 

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Business tips Cash Finance Function

Collect your debtors faster

Collect your debtors faster

Did you know that you still have to pay tax on your debtors, even if you haven’t yet collected them? 

This is because you pay tax on your sales figures, whether you’ve collected the cash or not. 

So, how do you collect your debtors faster? 

  1. Agree your payment terms at the time of sale. 

  1. Ensure your customer signs your Terms of Trade before you start the job. 

  1. Include a guarantee in your payment terms. 

  1. Invoice as quickly as you can. 

  1. Ask for a deposit prior to starting the job. 

  1. Change your payment terms to within 7 days of invoice or on delivery. 

  1. Send statements with only two columns – current and OVERDUE. 

  1. Follow up the day after the due date. 

  1. Have someone other than the owner be responsible for collection of debtors (owners are usually too soft!). 

  1. Document any changes to your standard payment terms in writing. 

  1. Use a debt collector sooner rather than later – the longer you leave it, the harder it is to collect. 

  1. Don’t provide credit to customers who’ve been late payers in the past, and don’t offer more credit to customers with outstanding payments. 

Don’t procrastinate on your debtors. Establish clear payment terms and ensure you stick to them. 

“It’s the squeaky wheel that gets the oil.” – Anon 

Need help developing your Debtor Management Policy? We can help… get in touch! 

2. Download our free guide on “7 mistakes to avoid – to stop your fitness business running out of cash” https://debbiebaileymoney.co.uk//fitness-ebook/ 

3. Connect with me on social media: 

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Business tips Cash Finance Function Gym

Zero to Hero

From Zero To Hero Event

Learn how to be wildly profitable with ease even if you’re a newbie! We help you to go from zero to hero!

What you’ll get from this event

For attending From Zero To Hero live online

This is an unprecedented event for the health & wellness industry, with 13 top expert speakers offering you leadership & advice on marketing, sales & mindset to help lead you into the future – all on one single platform, for 1 entire day, 100% FREE!

This online event is perfect for anyone who’s a fitness, health and wellness professional, gym, studio or health club owner – with a brand new or existing business.

Book on here: Zero to Hero event

The presentations

Landing corporate clients for your health & wellness business

What cashflow means for fitness businesses

You’ll learn why cashflow is important for your business growth and survival. By the end of the presentation, Debbie will teach you how to create a cashflow forecast for your business.

3 ways to use client feedback to write copy that sells

In a jam-packed industry like health and fitness, it can be hard to stand out. You’ll learn from Louise how to ask for glowing client feedback and use that to craft a killer brand message and turn that into a persuasive copy that sells.

How to get stuff done and reduce stress

You’ll learn from Isi tips and strategies to get more done in less time. Her advice revolves around overcoming procrastination and staying focussed for longer. So you’ll start to see what it feels like to get more done and be less stressed and less exhausted after a long working day.

Building professional networks online and at events

Shamshad will help you to get a better understanding of different types of networking events and how to prepare for these so they use your time effectively. By the end of her training session, you’ll know how to write an elevator pitch for your business and build meaningful networks.

Automation made simple

You’ll learn a lot from Yvonne about what is possible by using Zapier to automate your business. By using templates and training videos you can have a go at implementing simple steps to save time. You’ll know how to map out your workflow.

Amplify your social media

From Minessa you’ll learn 3 Facebook and social media tactics that won’t take much time but will amplify your voice online so that you can do less and make more. You’ll be able to create content that attracts your tribe and clients.

Coping with toxic stress

You’ll learn from Jaque how to navigate through high stress times, just like this Covid situation and be able overcome these mentally exhausting problems. You’ll be able to embrace self-empowerment, which is pretty much needed.

How to leverage your expertise and raise your profile by getting in the media in three easy steps

Laura will share with you PR 101: going back to basics and busting a few well-known PR myths. You’ll learn about how to find opportunities so that you’re able to increase visibility and share your message on a larger scale. She’ll also share her top 3 tips on how to get yourself featured in the press.

How to earn more, without doing more

Gemma will show how a website can earn you money by implementing some simple steps. You’ll learn 5 proven methods of increasing conversions through your website and she’ll also share best practices to help get you that ROI from your time or money invested in the website.

How to influence people with high-quality visuals and effective positioning

You’ll learn about how design can help you with building authority and what’s the importance of positioning. Mehar will give you actionable steps, so you’ll know how to influence people with your visuals on social media. She’ll help you with effective postitioning on Instagram.

Increase your revenue by adding structure & consistency to your social media

You’ll learn from Janine about the tools you can use to increase your online presence and revenue, by adding structure and consistency to your social media platforms.

How video can elevate your brand or startup

Mark will take you through how video is an essential part of many brands marketing strategy today and how it should be a part of yours. You’ll learn about how you can create for your business and how to execute a plan for a video. You’ll have a greater understanding of video, the kinds of video you can have made for your business and how it greatly benefit your business.

NO this is NOT some big pitch fest online seminar. This is in-fact a LIVE training event with 13 TOP EXPERTS!

And you can have access to it from the comfort of your own home!

Meaning…

NO long hours travelling & NO spending money on hotels

You’ve just got to show up at your computer or smart device ready to grow & learn!

This will be different from all other online events you’ve ever attended so far! No FLUFF, no HYPE just straight to the point strategies around marketing, sales and mindset. So, it’s perfect for anyone who’s a fitness, health and wellness professional, gym, studio or health club owner – with a brand new or existing business!

Who is this event for?

  • health and wellness professionals who truly want to help people to live happier and healthier lives
  • fitness professionals who desire to make a much bigger impact
  • studios, gyms and health clubs who have and are struggling because of the pandemic
  • trainers, coaches and instructors who have and are struggling to get clients consistently
  • sports recreational businesses who want a structure and guidance
  • those who have and are struggling to get their message out to the people who really need help
  • those who are passionate about helping others, making a change, but have secretly been struggling to build a successful health, fitness or wellness business

How much will “not attending” cost?

Think about the average monthly income of a personal trainer over the past 12 months…

Let’s say their average income was £1,500 and that’s generous because the average salary of a personal trainer in the UK is £19,601…

So their goal is £10,000 per month through their business because they don’t want to be broke all the time…

That means they have a shortfall of £8,500 every single month…

So, basically, they lose £8,500 every single month because they don’t know how to get from zero to hero…

And that’s a staggering £102,000 opportunity cost per year…

Hosted by Viktoria Thorbjorn

The speakers

  • Debbie Hancock, Southbourne Accountancy
  • Miriam Gilbert, Founder & CEO ImpactfulnessLab
  • Louise Shanahan , Health Copywriter and Director, The Copy Prescription
  • Shamshad Walker , Marketing Consultant
  • Isi Dixon , Productivity Expert
  • Gemma Murphy , Website Architect
  • Janine Edwards , Founder of Media Pimps Marketing & PR
  • Mehar Lebana , Graphic Designer
  • Yvonne Hemmings , Automation Made Simple
  • Minessa Konecky , Direct To Success
  • Jaque Hanson , Bee Present Wellness
  • Laura Perkes , PR with Perkes
  • Mark Weathers , Mark Weathers Creative

free online event

Discover how to be wildly profitable with ease even if you’re a newbie during the pandemic!

Get your online event ticket 100% FREE

This is truly a once in a lifetime opportunity!

Claim your FREE ticket, valued at £1,999. Hurry – before there are no seats left!

So why do we give away this for free?

Obviously, we won’t get rich by this, so here’s the real reason;

2020 has been a horrible year for everyone and our industry got hit by the covid truck and this has caused severe damage.

It is kind of a ‘hit and run’ case.

And this industry is the one responsible for peoples’ health and wellbeing before the NHS jumps in.

We’re the first line of defence or prevention if you like.

If we fall, others will follow us. And we can’t afford that…

From here, you have 2 options

Either do nothing and continue to struggle and fear that covid will further affect your business and your financial situation…

Or make a conscious decision and invest your time in the ‘from Zero to Hero’ live online event and follow a different path.

Nothing changes if YOU don’t change. It’s up to YOU and on YOU.

Book on here: Zero to Hero event

2. Download our free guide on “7 mistakes to avoid – to stop your fitness business running out of cash” https://debbiebaileymoney.co.uk//fitness-ebook/ 

3. Book onto the free event: Book here

4. Connect with me on social media: