Experian Business Finance 101: An Essential Toolkit for all Business Owners

Posted on by Jo Shaw

Estimated read time: 5 mins

Starting and running your own small business will often involve wearing many different hats. Not only will you clearly have to have the correct skills to perform your particular business’ specific services, but you’ll also quite often have to adopt the role of head of finance or accountant too.

Especially for those businesses that are just starting out, the world of business finance can seem like a minefield with many business owners trying their best to learn on the job.

But, this trial and error tactic can only get you so far, and with more and more small businesses entering the market – 5.7 million in the UK alone – if you’re a small business owner struggling to navigate the murky waters of business finance, the time is now to get clued up. Here are a few tools to help you on your way.

Break-even, don’t break the bank

When you’re a start-up it can be difficult to work out at which point your new venture has reached a point where the profits are equal to the outgoing costs – this is a point referred to as the break-even point.

A clear marker of success of any new business is the time it takes from starting the business to the point at which a company breaks even.

In the past, working out this important factor involved some serious number crunching using an age-old formula, but now thanks to tools such as Experian’s Break Even Calculator, this can be done quickly and easily at the click of a few buttons.

Don’t get caught out with business loans

Securing credit is often part and parcel of many businesses and although they can seem like a welcome lifeline, without careful planning, it’s easy to run into a world of trouble. It’s important to only take out a loan if you’re certain you’ll be able to pay it back along with the interest. In working this out, you’ll have to look at the value of the loan, how long you have to pay it back and the interest you’ll be charged on it.

Our Business Loan Calculator is a quick way to work out whether a business loan you’ve been offered is right for you and your business, so you can make a well-informed decision about whether to accept it.

Simply enter the full amount you’re looking to borrow, how long you’ve got to pay the loan off in months (and any interest), and our calculator will let you know how much you’ll need to pay in total to pay off that loan, including monthly repayments, an estimate of how much interest you’d be paying and the overall outstanding balance at each stage of the loan’s lifetime.

Don’t let tax be taxing

Getting your head around VAT and taxable supplies can be confusing especially if you’re a business that is just starting out. Businesses that are VAT registered will need to pay HMRC a percentage of the money they receive from certain sources such as business sales, commission, and the sale of business assets – these are all known as ‘taxable supplies’1.

Under current UK tax laws, even if a business hasn’t charged VAT to the customer, the business will still be liable to pay that VAT amount to HMRC. As a result, it’s so important that all businesses are completely in the know about what to include VAT on, and how much to charge.

Our VAT calculator is a convenient way to calculate VAT quickly and easily. Simply add the value of the item or services along with your VAT rate into the subsequent boxes, then choose whether you wish to add the VAT to a pre-tax value or subtract it from a total value, and the tool will work it out for you.

Starting and running your own business can be both challenging and exciting but let business finances be one less thing you have to worry about by exploring all our free Experian Business Tools. A comprehensive toolkit of seven useful tools including our Break Even Calculator, Return on Investment Calculator, Email Return on Investment Calculator and VAT Calculator, each solution has been specially designed to help steer your business to success.



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