The Good Retirement Guide 2014 by Frances Kay

Author:Frances Kay
Language: eng
Format: epub
Publisher: Kogan Page

On the other hand here are some of the reasons for seeking a part- or full-time employed position:

a local employer;

security of income;

benefits of holiday pay, pension, paid sick leave, and perhaps private health and life cover;

bonuses and perhaps a car;

team aspect and friendship of colleagues;

known travel requirements;

no personal liability if things go badly wrong;

staff discounts or other perks.

Why bother with a plan?

Before getting into plans and ‘Why bother?’ it is probably useful to gain an overview of some common reasons why businesses fail and set this in context with the specifics of running a small business to help you succeed.

There are thousands of success stories about those who took the plunge nearing or post-retirement to build a business that provided involvement, fun and income, plus a legacy for their children. However, for every two success stories there is a business that does not work out and your money could disappear fast if you set up in the wrong way or overstretch yourself. Worst of all you could lose your home if things go really badly wrong so the reasons below and tips throughout this chapter should help you understand and then deal with the risks.

Why businesses fail – learning the lessons

Businesses can fail for many reasons. Learn from the mistakes of others and you will be doing yourself a favour. The number-one reason why businesses fail is that the market moves on and you are left behind. Take time out to think and keep abreast of what your customers really want (have you tried asking them recently?); where are your competitors and what are they doing to keep on top of or ahead of the market and, overall, how is the market moving? Once you get left behind, you’ll find the demand for your services declining and your income reducing – a rather toxic mix.

A second reason (and one that may increase in 2014) is the failure to deal with tax affairs properly. The implications of penalties and interest levied by HMRC (Her Majesty’s Revenue & Customs) are often ignored and only hit home when it is too late. Keep your books properly and retain all records for six years after the year end – in brief, if you can’t prove it, you may lose the tax benefit and pay additional tax, penalties and interest. If there is a problem, HMRC can go back and inspect previous years’ accounts (for up to five years or even longer). If you fail to pay your tax fully when it is due, HMRC will pursue you vigorously and you are giving HMRC a reason to have a closer look at you and your business. On the other hand, if you have genuine cash flow difficulties and cannot pay your tax on the due date, talk to HMRC and you may find their attitude refreshing if it is the first time you have stumbled.

A third reason (and again one that may increase in 2014) is a failure to manage your cash flow and this includes a lack of access to funding.

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