Waste not, want not

by Melissa Hancock - Thursday, 8th May 2008

“In my experience, I’ve found that most of the people that are giving advice to small businesses are accountants, bankers and representatives from organisations like Business Link. The problem is that none of these people have ever run a small business!

They basically get you to write a business plan and borrow money which surprisingly enough doesn’t actually help very much,” says Bourke who set up Vegetarian Guides in 1991. To date, he has published a Europe and France guide, three editions of the Britain guide and the sixth edition of Vegetarian London has just been released this month.

“The most important thing is to drive down your costs and one of the best ways is to avoid ridiculous bank charges.”

Bourke recalls how he started off his business banking with Barclays who were charging him several hundreds of pounds a year in bank charges and interest fees on loans.

“I estimated that around five per cent of my turnover was being pocketed by the bank which just seemed a ludicrous ratio for a small business trying to get off the ground. I wish I had realised earlier that there were banks out there that offer free business banking like the Co-op or Alliance & Leicester. Of course, once I’d switched banks, my margins drastically improved."

"Bourke also advises fledgeling small businesses to do their own accounting which he explains can save thousands of pounds: “You can buy an office self-accounting package like QuickBooks or Sage Instant for £100 which will do it all for you. By contrast, most banks will charge you £25 a month to use their small business accounting software – that translates to £3,000 over ten years!”

Bourke recalls how he has been advised by four accountants not to do his own book-keeping. "They all said: ‘Ooh, Sage isn’t very good, or QuickBooks isn’t great with this.’ I remember thinking: ‘200,000 people use it – what are you talking about?!’ Of course they want me to pay them £30 an hour to post invoices and purchases through their accounting system that I’ve already processed.”

As far as Bourke is concerned, the only time that a new business owner should enlist the help of an accountant is for checking their annual accounts: “Again you need to be savvy with this. Most accountancy firms will charge you £700 a day and what most people don’t realise is that the accountant will only see about £100, the remaining £600 goes to the directors and paying off overheads. So I now use a part-time accountant who I pay £100 to spend a day doing my annual accounts. He’s happy and so am I!”

Picture source

Tags: small business accounting software, quickbooks, vegetarian guides, alliance leicester, business link, sage,