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Managing money isn't a secret. It's about following simple rules on book-keeping, making sure you keep financial records, invoicing promptly, following up overdue invoices and having an overall financial plan and strategy. This way you'll know where you are, whether you're hitting targets and, if there's a hiccup, making sure you can handle it from reserves or loans.

Keeping records of what's coming in and what's going out is essential - and for the first year it's a good idea to do it by hand, using one of the simple Receipts and Payments books you can buy from any good stationery shop. That way you'll get a feel for cash flow.

At the same time, set up a simple filing system so that your invoices and receipt payments are kept in order and stored sensibly. Lever arch files are fine if you're dealing with small quantities - you can slip invoices and receipts into plastic envelopes month by month or use a small office file. Again, go to a good stationery shop to see what suits you best.
 
Let's see how Doctor PC has kept up his Receipts and Payments book over the first fortnight in April.

Your cash flow depends on keeping on top of invoices and payments, sending reminders on overdue payments and watching your business bank account. If you do face a cash flow crisis because of late payments or an unexpected bill, chase invoices
by phone and get a firm payment date.

Always, always keep in touch with your bank manager if there's a problem. The one thing that really worries banks is a business which puts its head in the sand and hopes a potential problem will go away. It won't. Talk things through - they're on your side.

It's advisable to get an accountant to put together all the figures at the end of the financial year and present your accounts to the Inland Revenue. You'll have to pay for the service, but it often saves money - sometimes a lot of money - in the long run. Accountants know all about the many costs, expenses and charges you can set against tax, and they'll help keep your tax bill as low as possible.

Make your bank an ally. Your branch will almost certainly have a dedicated business manager with plenty of experience of small businesses and small business start-ups. Make an appointment to meet him or her so that you get to know each other.

Making it

• Get a good idea, research it thoroughly, find potential customers
• Once you're up and running, look after your customers - they're essential for your success
• Identify which bits of your business are doing best - build on your strengths
• Work hard - very hard in the early stages

Getting it

• Agree payment times with your customers
• Keep records - either manually or using a specialist computer programme. If you take the computer route, back them up with hard copies. Remember, computers can crash
• Keep on top of your invoices - invoice promptly and chase overdue invoices

Keeping it

• Prepare a Business Plan and work to the financial goals you've set yourself
• Keep your books up-to-date - it's how you monitor the health of your business
• Manage your cash flow properly - keep a constant eye on cash in and cash out
• Make allowances for delays or costs you haven't expected