Breaking even

The first financial target of any business is to break even – that is to cover all the costs incurred by the business. The second target, which is the real objective, is to make a profit. Ideally you should aim to make a return on the money that you have invested in the business that is higher than you could make if you invested the money elsewhere.

Hot topic

The way bankrupts are treated in England and Wales is undergoing major change, under measures contained in the Enterprise Act 2002, which came into force on 1 April 2004. The Act modernises insolvency law for both companies and individuals. The changes mean that most bankrupts who meet certain conditions will find themselves discharged within a year, instead of the previous two or three years. This is hoped to encourage more entrepreneurs whose businesses fail to have another try. See www.insolvency.gov.uk for more details.