Back in January, we wrote a blog on making New Year’s Resolutions for your business. The focus of this was tax, and the aim was to encourage a shift in mindset to consider the big picture by planning your future tax strategy as early as possible.

We have since noticed a subtle danger in this mindset, which we want to address.

There is a temptation to go through the motions and take a step back to look at the “bigger picture”, yet still focusing exclusively on one small aspect of financial performance – tax payments.

We find ourselves asking the wrong questions. “How do I reduce my tax payments?” replaces the much more useful “how do I strengthen my business?”. We effectively focus on cutting costs when we could (and should) be focusing on building profit.

Now, don’t get me wrong, it is important to understand the tax consequences of the business decisions you make; no-one enjoys paying tax. Luckily there are some straightforward options which may be open to you to provide some tax savings, (incorporation, or restructuring the shares in your business are two which spring to mind), what I am trying to point out is that these questions are only part of wider conversation, a conversation which includes (but is not limited to) the following:

• Do I have a marketing plan which clearly communicates to my clients the essence of my business? Is it working? Am I seeing a continuing increase in new patients conversions and is my turnover increasing accordingly?
• If not – why not? Any plan needs to be regularly reviewed and improved to be effective, never be afraid to ask this question of any professionals you are working with!
• Do I keep track of the financial performance of my business throughout the year? A key way to minimise the chance of being taken by surprise by a high tax bill, is to make sure you regularly understand the profitability of your business.
• Do I have a long-term plan on where I want to take this business (and potentially, how I’m going to exit from it)?

These questions are just some of the first which came to my mind as I was writing this blog, but there a plenty of other avenues which you can explore to strengthen and grow a business.

Having just ticked over into a new tax year, maybe its time your business gets a fresh boost with a new marketing plan, or you begin to work out how you are going to approach retiring in 5 years?

As always, remember that you do not have to face these questions alone. If you are a dentist and want to engage effectively with these areas, then please give us a call on 01872 300232 or email us at hello@hivebusiness.co.uk.