Six New Year’s resolutions for your business

The start of a new year is the perfect time to review all areas of your business. By doing this you can work out how to make improvements and prepare for any potential challenges over the next 12 months. 

The New Year’s resolutions for businesses that we shared in January 2023 still apply, but here are six more to add to your list in 2024.   

Consider your business formation 

If you are operating as a sole trader, 2024 could be the year to consider switching to a limited company.  

Unlike sole traders, a limited company is a separate legal entity registered at Companies House, so your personal assets are protected.  

Going limited can also increase your business' credibility in the market and help to protect your business name as your brand grows.  

If you plan to access funding, being a limited company can give you greater borrowing power and you may be able to access more money from lenders and investors. 

Limited companies aren’t suitable for all situations so you should speak to your accountant for personalised advice.  

Read our guide to UK company formation.  

Review your goals and set new objectives 

To help you make effective decisions and enjoy the business growth that you want, you should set goals and objectives.  

If you created goals for your business in 2023, the new year is a good time to review them and check you have achieved what you intended. 

Common goals include:  

• increasing profit margins by a specific percentage,  
• driving up sales by a target amount,  
• boosting customer satisfaction and having something in place to record satisfaction scores,  
• increasing your business’ market share by a certain amount  
• and improving brand awareness and having something in place to monitor this. 

Review each goal. Check whether it has been met or is on track to being achieved. If it isn’t, you should make adjustments. For example, if you hoped to improve profit margins but have failed to do so, you could review your business costs and make reductions.  

Read more details on setting effective business goals here. 

Embrace Artificial Intelligence 

Artificial Intelligence (AI) was one of the biggest trends in 2023, with the publisher of the Collins Dictionary naming AI the word of the year. 

Since groundbreaking generative AI tool ChatGPT arrived at the end of 2022, it has made global headlines and led to a huge conversation around the potential of the technology to transform society and the world of work.  

Developments in AI are moving fast and the new year is a good time to consider how the available tools could benefit your business.  

Increased productivity and efficiency is a key advantage of AI as the tools can automate and improve many business tasks including content creation, transcription and customer service communication. 

There are downsides though, with concerns around mistakes and inaccuracies, as well as worries related to privacy, bias, the storing of personal data and cyber security.  

For more advice on the benefits and risks of artificial intelligence, plus examples of AI tools you could adopt for your business in 2024, read this guide.  

Improve your tax planning 

There are various tax planning actions you can take to reduce your tax bill and boost your cash flow. Ways to do it include: 

• Claim allowable expenses: These are costs that are “wholly and exclusively” for the purposes of running your business that can be deducted from your taxable income. Examples include expenses for stationery, phone bills, business rates, and energy bills.  
• Make pension payments: Sole traders and limited company directors can benefit from tax relief by paying into a pension. 
• Claim the Employment Allowance: Eligible employers can reduce their annual National Insurance liability by up to £5,000 using this Government scheme. 
• Claim research and development tax credits: R&D tax relief rewards UK businesses investing in innovative science and technology projects. 

Boost your sustainability  

Although the Government delayed some of its net zero plans in September 2023, sustainability is an increasingly important issue for businesses. 

Adopting more sustainable practices isn’t just about environmental benefits, it can give you a commercial advantage too. Many consumers consider the environmental and social impact of a business before purchasing a product or buying a service, so being sustainable can mean more sales. 

Businesses also have legal responsibilities around environmentally friendly practices. For example, bans on use of some single plastic came into force in England and Wales in October 2023, adding to similar rules introduced in Scotland in 2022. 

Ways to improve your business’ sustainability in 2024 include tackling your energy use, reducing waste, using sustainable materials and adopting greener transport methods. 

For more details on running a sustainable business, read this guide. 

Prepare for basis period reform 

If you run an unincorporated business with an accounting year end that isn’t 31st March or 5th April, you will be impacted by the Government’s basis period reform. 

The change, which is aimed at streamlining the tax system as part of HM Revenue and Customs’ Making Tax Digital initiative, means business profits will be calculated for the tax year rather than for the accounting year. 

As part of the reform, 2023/24 is a transition year. Most businesses will have to produce accounts up to the end of their accounting year as well as transitional accounts up to 5th April 2024. You should plan for this with your accountant during 2024. 

For more advice on basic period reform, read this guide. 

Give your business a head start today 

Dedicating time to looking ahead gives you a comprehensive plan for the coming months. 

If you need help or advice with the financial aspects of running your business, call TaxAssist Accountants on 01322 553597 or complete our online enquiry form. 

Last updated: 20th March 2024