With the cost-of-living crisis, inflation, and tax rises, many businesses need to increase turnover by 19% just to stand still. We hate to be doom and gloom all the time, but if you’re not proactive, your tax bill will arrive in January 2025, and it’ll be too late to weather this challenge.So, let’s look an example of what this may mean for you:A limited company with no employeesWith a turnover of: £150,000A net profit of: £120,000A net profit margin of: 80%Due to the big change in corporation tax with marginal rate of 26.5% for profits between £50,000 to £250,000, 10.05% inflation (as of Jan 2023) and rising costsThe real term equivalent net income is effectively £90,378 (compared to £103,797 in 2022/23)That is a £13,418 reductionIn this example, you’d need to increase your turnover to £178,498 (by 19%) to match the same take home.So where does this 19% come from? Price increasesIncrease in volumeNew businessIncrease in productivityEfficienciesAnd where do you start? Ensure your accounts are up to date so you have a clear picture of what you need to do. Read our article on the benefits of having up to date management accounts If you haven’t already increased your prices this year, increase them. We have a detailed article here on how to increase your prices without upsetting your customers. It may be that you offer higher value services or products, package some together or justify your costs and why the price increase is necessaryFocus on the top half of your accounts (Turnover, cost of sales, gross profit)Assess profit trees – where does most of your profit come from? Can you do more of that profitable work?Cut low margin products and services unless loss leadersCut poorly priced jobs/over-serviced clientsNegotiate with your cost of sales suppliers – bulk buying powersPlan to leverage your time as you can add the most value to your businessWhat the Budget really means for owner-managed businesses – Event recordingIn the below video we share all the facts you need to know and our advice on how you formulate a plan to not let this challenging time damage your business. Book a free consultation with one of our advisers today!With the cost of living crisis, inflation and tax rises, it’s a challenging time to be a business owner. It’s vital you are proactive now and don’t just bury your head in the sand and then it’s too late to make any changes.Complete the form to book a free consultation with an adviser to take the first steps to implementing a plan for the year ahead. Book a meeting Book a free consultation with an adviser Fill in the form below and we’ll be in touch with you shortly to arrange a date and time for the meeting. General EnquiryYour full name*Contact no.*Email address* Business name*Industry / Profession*Your messageBy submitting, you consent to being contacted via email or phone by one of our Advisers and acknowledge that the information you provide will be securely stored for future communications in compliance with the General Data Protection Regulation (GDPR).CAPTCHAPhoneThis field is for validation purposes and should be left unchanged. Share this articleOther posts of interest 15th September 2022Credit Ratings for Businesses: How to improve them Read more 3rd August 2020How to change VAT rate in Xero Read more 17th December 2020CBILS and BBLS – apply now to keep your options open Read more See more articles