An undomestic VAT

An undomestic VAT
Analysis of the partial judgment of the High Court in the case of Margaret Akiiki Rwaheru and 13,945 others

Like most developing countries, Uganda struggles to collect tax from the informal sector, which is one of the biggest sectors of the economy. The legislators and the Uganda Revenue Authority (URA) have made several attempts to bring the informal traders within the tax net in a manner that is administratively efficient. One such effort is the URA’s imposition and collection of “domestic VAT” at the point of importation of goods.
Though the imposition and collection of domestic VAT has long been considered controversial, it was not legally challenged until the class action case of Margaret Akiiki Rwaheru and 13,945 others vs. URA (Civil Suit No. 117 of 2013). In that case, Ms Akiiki and others (the plaintiffs) sought a declaration that there is no legal basis for the URA to charge domestic VAT on imported goods. The plaintiffs also asked the Court to order the URA repay those taxes illegally collected, together with interest.
On 10 January 2014, the Commercial Division of the High Court of Uganda delivered its partial judgment covering the points of law raised in the case. The High Court was scheduled to deliver its judgment separately on the merits of the facts of the case as proven by the plaintiffs, particularly for the purposes of awarding costs. However, the proceedings in the High Court were stayed by the fact that there is a pending appeal on the decision on the point of law (Court of Appeal Civil Appeal No. 98 of 2015). As such, the final judgment in respect of the High Court case has not been delivered to date.
Background
Article 152 (1) of Uganda’s Constitution of 1995 prohibits the imposition of tax unless authorized by an Act of Parliament. There is no specific Act of Parliament authorizing the imposition of domestic VAT on non VAT registered importers. As a result, the general public and tax community were surprised when the URA included a note in its VAT guidelines (the ‘URA Guidelines’) that stated that “Domestic VAT for Non VAT registered importers” had come into effect on 1 March 2002. In the guidelines, the URA defined domestic VAT as VAT charged on goods whose value is UGX 4,000,000 or more. According to the guidelines, importers who meet the following are required to pay domestic VAT:

    The importer is not VAT registered.
    The Cost, Insurance, Freight (CIF) value (as determined by Customs) of the goods is UGX 4,000,000 or more.
    The goods are subject to the standard VAT rate of 18%.
    The goods are not personal effects or motor vehicles.


The URA guidelines further provide that domestic VAT is payable at the customs entry point together with “other customs taxes” and that the value for domestic tax purposes is computed by applying a 15% mark-up on the value on which VAT at Customs is computed, which is the sum total of CIF plus import duty and excise duty (the so-called Customs VAT value). The mark-up is the expected value added between the stage of importation and sale.
Based on the URA’s guidelines, the total combined VAT suffered by the importers is 33%, which is neither provided for by the Value Added Tax Act (Cap 349) nor the East African Community Customs Management Act, 2004.

In the Margaret Akiiki Rwaheru case, the URA explained its justification for imposition of domestic VAT on imports of goods. According to the URA, given the fact that many of taxpayers that fall into the informal sector intend to circumvent compulsory VAT registration, since they do not keep proper records, have no fixed places of abode, have multiple registrations, or are simply not registered for VAT at all, the URA faces administrative challenges in ascertaining output VAT. As a result, the URA feels it is important to collect input VAT at importation and output VAT (domestic VAT at 15%) at the point of importation. Furthermore, the URA claims that it has authority to do so under Section 32 (1) (c) of Cap 349, which empowers the URA Commissioner General to make an assessment of the amount of tax payable by a person where the Commissioner General has reasonable grounds to believe that a person will become liable to pay tax but is unlikely to pay the amount due.

The URA further explained that the domestic VAT did not amount to a different tax with a different rate because the calculation was based on an estimated mark-up (15%), derived through a research/market survey, that was meant to represent the expected value added on imports between the stage of importation and sale in the domestic market, taking into account costs incurred as well as the profit margin. The URA also noted that aggrieved taxpayers had a legal right to file a VAT return and could seek a refund for the overpaid tax under Section 42 (3) of Cap 349. According to the URA, the plaintiffs’ action was in essence an omnibus objection to VAT assessments at importation which was not provided for under Cap 349.

As the plaintiffs’ Counsel in the case pointed out, by imposing domestic VAT on imports, the URA made several assumptions that contravened the provisions of Cap 349. First, the URA assumed that all imports of goods worth over UGX 4,000,000 are for sale in the domestic market at a profit and that from such a sale, output tax would always exceed input tax and, as a result, an importer is always in a VAT payable position rather than a VAT refundable position. The plaintiffs argued that by assuming that all importers of goods worth over UGX 4,000,000 are eligible for VAT registration, the URA was effectively rendering the annual VAT registration threshold of UGX 50m (prior to the July 1, 2015 amendment to Cap 349 which raised the VAT registration threshold to UGX 150m) set out in Cap 349, meaningless.

And finally, the plaintiffs argued that to require unregistered persons to pay VAT without establishing whether they are taxable persons under the Act is contrary to the provisions of Cap 349.

In concluding that imposition of domestic VAT is not illegal per se, the judge pointed out that it is was irregular for the URA to assess taxes on taxable supplies before the supply takes place. The judge added that the URA’s conclusion that all importers are unlikely to pay VAT on future taxable supplies of goods should be determined on a case-by-case basis, rather than on a blanket basis for administrative convenience. The judge concluded that it was unnecessary for the URA to resort to relying on estimated VAT assessments on speculative future supplies and, instead, the URA should use the various penal provisions specified by Cap 349, such as penalties for failure to apply for registration, failure to lodge returns, and failure to maintain proper records.

The judge also noted that it cannot be assumed that the taxable person shall not lodge taxable returns which are accurate for the URA to invoke the provisions of Section 32 (1) (c) of Cap 349 or even to come to a conclusion that there are reasonable grounds to believe that the person will become liable to pay tax but is unlikely to pay the amount due.
Furthermore, he explained that a strict interpretation of Section 32 (1) (c) of Cap 349 confines the belief of the URA to reasonable grounds that a particular person will become liable to pay tax but is unlikely to pay the amount due. This by necessary implication refers to the circumstances of a particular person in each case. Consequently, Section 32 (1) (c) of Cap 349 can only be invoked on one taxpayer at a time and cannot cover a general category of taxpayers.

The judge concluded that the plaintiffs had only established generally that it would be irregular to charge VAT on taxable supplies which have not occurred and without giving the reasons why an importer who has paid VAT on the import ought also to pay VAT on a taxable supply before making the supply, on the basis of an estimate made under section 32 (1) (c) of Cap 349. He was of the view that while the charging of VAT on a person who would never supply the goods as a taxable supply would be illegal as submitted by the plaintiffs, VAT charged on an importer whose goods are subsequently supplied in the domestic market is an irregularity and not an illegality as tax on taxable supplies is prescribed by Cap 349. In other words it is a curable defect.

Whilst the point about the definition of what was domestic about the VAT collected by the URA at 15% was somewhat lost in the nomenclature of other legislation, it was a touch dispiriting to see that the exposition on the purpose of Section 32 (1) (c) of Cap 349 dealing with assessments was somewhat missed. The URA seems to stretch the use of Section 32 (1) (c) by applying it in instances where, as is widely accepted is a basic premise of VAT internationally, no supply has actually taken place.  There also appears to be distortive possibilities in the imposition of domestic VAT if a particular importer does indeed intend to make onward supplies of those goods, but for a consideration below the registration threshold. In such an instance, the URA would have raised tax illegally since it can safely be assumed that Parliament intended to exclude traders making supplies below the threshold from the clutches of VAT. Since the VAT registration threshold was revised upwards to UGX 150m on 1 July 2015, more tax payers are likely to be captured by the low domestic VAT threshold of UGX 4m thus circumventing the overall purpose of the amendment.

Through the imposition of domestic VAT, the URA also seems to amend the penalty regime of Cap 349 by interchanging circumstances authorizing it to impose penalties with circumstances where it is authorized to raise an assessment. Through the domestic VAT mechanism, the URA utilizes Section 32 (1) (c) of Cap 349 which covers assessments and not penalties to covertly impose an omnibus penalty for anticipated infringements of Cap 349, for failure to apply for registration, failure to lodge returns, and failure to maintain proper records that are covered elsewhere in Cap 349.

Also of interest is the fact that the URA guidelines note that domestic VAT came into effect on 1 March 2002 notwithstanding that Section 32(1) (c) of Cap 349 which is the suggested enabling provision of the law has not been amended since the inception of Cap 349 on 1 July 1996.

If sustained in the appellate courts of law, the plaintiffs’ arguments in this case have wide-ranging ramifications for the URA and taxpayers alike. Subject to factual evidence and, of course, verification by a URA audit, some taxpayers may seek refunds of overpaid VAT in accordance with the provisions of Cap 349.
Given the URA’s practice of instigating wide-ranging audits into taxpayer’s affairs to verify refunds claimed, the URA may be overwhelmed by the large number of pre-refund verification audits and possible legal challenges that may result. Importers who have erroneously paid domestic VAT face the dilemma of deciding whether to pursue the VAT refund or to forfeit it in order to avoid the intrusive URA audits.
Very undomestic!

Random news

Small and Medium Practices (SMP) still a long way to the top of the class

Small and Medium Practices (SMP) still a long way to the top of the class

The commercial banks will soon start publishing their abridged audited accounts for the year ended 31 December 2015; in the New Vision and Daily Monitor. What will be evident is that the external auditors will be one of the Top 5 firms (PwC, KPMG, EY, Deloitte and PKF). For purposes of this article, the author has restricted himself to just 2014 and 2015 but a more expensive research will be extended to 20 years back.

In December 2013, the Bank of Uganda (BOU) published a list of 56  auditing firms that had passed the test and were thus considered suitable to audit the financial statements of commercial banks, credit institutions and microfinance deposit taking institutions (Tier 1,2 and 3). The list was compiled by BOU after the auditing firms have submitted their pre-qualifications documents by the due date. The author had not yet established the total number of auditing firms that had submitted their pre-qualifications documents to BOU.

Suffice to know that those 56 firms were all duly authorised firms approved by the Institute of Certified Public Accountants of Uganda (ICPAU). By that time, the total number of auditing firms approved by ICPAU was close to 190, meaning that about one-third had been pre-qualified by BOU.

However, the number of Tier 1-2 financial institutions is limited and not all the firms will get an audit. The table below shows that out of 27 Tier 1-3 financial institutions, only five of the 56 firms got an audit for the year ended 31 December 2014. The top three of PwC, KPMG and EY had the lion’s share auditing 22 of those financial institutions which constituted 97% of the total assets of that population – which stood at UGX 18 trillion (US$ 5,300 million). Compare this to assets of about 90 members of the Association of Microfinance Institutions of Uganda (AMFIU) which added up to between US$300-400million.

Source: Author’s own compilation from published accounts in newspapers
The story of dominance by the top firms may not be very different come 2015.

Of particular interest are the following statistics:

•    Out of the 56 auditing firms that were on the pre-qualification list in 2014, a total of 18 were unsuccessful in their bids for 2015. The author will attempt to find out why that was the case. It could be that the audit firm did not pass the BOU requirements or they did not meet the deadline or did not submit a bid altogether; these facts will be established;

•    For the year 2015, BOU pre-qualified a total of 64  audit firms. Notably, a total of 26 new audit firms were added onto the list which was a welcome boost to those firms. The author will in due course engage the BOU to find out the criteria for inclusion or exclusion of an audit firm from the pre-qualification list; and

•    Out of the 64 audit firms pre-qualified for 2015, a total of 22 of them were sole proprietorships. Originally, there was a view that only audit firms with at least two partners would be eligible for BOU pre-qualification, but that assertion has now been proven incorrect.

Is the situation in Kenya, Tanzania and Rwanda any different?  

Kenya has over 500 auditing firms registered with the Institute of Certified Public Accountants of Kenya, but with 56  commercial banks, mortgage financial institutions and microfinance banks. On the other hand, Tanzania has close to 150 auditing firms registered with the National Board for Accountants and Auditors of Tanzania, but with 44  commercial banks, finance leasing companies and other financial institutions. Last but not least, Rwanda has close to 35 auditing firms registered with the Institute of Certified Public Accountants of Rwanda, but with 17  commercial banks.

In Q2 2016, the author will have established whether the financial institutions in Tanzania, Kenya and Rwanda primarily also use appoint the top firms of PwC, KPMG, EY and Deloitte as their external auditors or is it a good mixture of the top firms and SMPs.

Do SMP have a chance on the Tier 1-3 cake?

The author thinks the SMPs have a good chance but one would need to dig deep into the critical success factors why the Tier 1-3 financial institutions continue to prefer PwC, KPMG, EY and Deloitte as their external auditors. In the meantime, the SMP have to be contented with auditing forex bureau which number over 200; non-deposit taking microfinance and SACCOs which could be approaching 2000 in number across Uganda. Should BOU consider regulating these Tier 4 institutions in the future, then the auditor’s pre-qualification list will end up being the same as the ICPAU list in its entirety.

Why you can’t assess auditing software just the same way as accounting software.

Why you can’t assess auditing software just the same way as accounting software.

As a representative of a popular audit software product, I often get asked by audit practitioners whether I could avail them with a demo copy of the software so that we can ‘play around with it’.

Since financial audit and accounting are related, how different can the respective software be? The self-check procedures accountants use to decide whether an accounting system is working are quite simple and straightforward in their design: You put in a piece of data at one end and check to see if the information that has been crunched through the system and that comes out at the other end meets your expectations. A simple example of such a procedure would be taking a pocket calculator and adding up the column of numbers your assistant gave you to see if it agrees with the total at the bottom of his schedule.

However procedures like these only tell you whether the accounting softwareis able to properly process information that has been fed into it according to the rules that you specify. It’s the sort of procedure where because you know in advance, what the results should be, you can test it quite easily using that input vs. output model.

The real job of an accountant however, is not merely entering a transaction in the records but rather of knowing how to classify transactions. For example, which engineering items are repairs and which ones should be treated as new fixed assets instead? Is the value of the motor car as shown in the accounts still valid or does it need to be marked down – or even up? The accountant is also responsible for summarising the transactions in the way that most suits the people who need the information and presenting it in a way that makes sense. Seen in this light, it is not possible to create “accounting” software as these accounting judgement roles cannot be played by a computer program. What we refer to as accounting software should really be referred to as bookkeeping software.

Auditing, on the other hand, is the checking process. Confirming that data going in at one end of the system comes out the way it should at the other end, is just one audit objective and frankly, it isn’t even the most important one. The most important objectives of audit are to determine whether the financial statements (a) contain all the information they should contain, (b) contain only the information they should contain and (c) are reported in a way that conforms to a pre-agreed standard.

It does involve the arithmetical accuracy checking that most accountants do in the first place. However it also involves checking that the basis of classifying and summarising information was properly done – a test of judgement(because so-called accounting programs will execute incorrect instructionsto summarise or classify information just as faithfully as they will correct ones.)It also involves checking that there is no information missing  - another judgement test.It also involves checking that the information is not overstated – also a matter of judgement. That’s not all however. International Standards on Auditing now actually pay attention to the process that was used to evaluate the accountant and it requires certain mandatory steps to be taken and documented, no matter how certain the auditor may be of the correct situation.

This leads to an interesting question then; is it possible to create software that can meet all of these requirements of the audit? Data interrogation and sample selection software could go through the accounting information and try to extract information that makes sense but could it tell if the classification method used by the accountant was wrong? How would it decide if the evidence provided was acceptable? This is a trickier proposition and indeed, nobody has yet been able to design software that actually “audits”, much in the same way that nobody has been able to design software that does “accounting.”

What does this mean for a practitioner thinking about buying audit software? Audit software doesn’t have transactions that you can insert at one end and click to see if they have been properly classified at the other end. Instead it provides what amounts to very a long and sophisticated checklist (or series of checklists) of the all the procedures an auditor needs to carry out to determine the three objectives and comply with the mandatory procedures mentioned above. These are extensive and run, at present to nearly 800 separate mandatory procedures in the International Standards on Auditing. And that’s not counting the steps in the audit programmes in each section of the audit file. There is only one way to tell if this collection of checklistsworks properly; carry out an audit with it and submit the results of the audit to an independent quality reviewer to determine if the work was done properly.

People who aren’t skilled enough to know how to use the checklist will not be able to gauge whether they failed or passed the quality review due to an inadequacy of their checklist or due to their failure to use it properly.

Also, although the ISAs prescribe the approach to the audit to which all auditors should conform and in some instances even stipulate the exact tests to be carried out, they are not precise enough about how to do it. For example, there are more than a dozen ways to develop a sampling frame that produces a truly random sample. Which one is most appropriate? What’s a reasonable maximum or minimum sample size? If your sample contains an error, by how much should you extend your tests if at all? What’s the best way to calculate materiality? How many levels of review should there be in a particular assignment? The ISAs just don’t say.

Audit software helps by providing handy computation tools for sample design and selection and guidance on developing materiality. They even provide specific program steps for various areas of the audit. They also nudge you, (by blocking access to particular file areas and questionnaires), into using the work flow sequence that is most efficient or effective. These features, in the aggregate, comprise the methodology of particular audit software.

Without training by a person with proper experience on the specific methodology of a particular piece of audit software, it could be difficult to understand how all the questionnaires, computing tools and checklists work together to achieve efficient compliance with the ISAs.

For these reasons, taking a demo copy of audit software to try it out is unlikely to be helpful unless you are also willing to undergo not just “demo” training in the methodology but also a “demo” quality review – all lengthy and costly steps.

I would suggest that a more reassuring route would be to work through a presentation with an experienced user and ask to be shown all the features that you consider to be key in your existing methodology to ensure that they are present. Another, perhaps more important source of reassurance would be to look at the number of other practitioners relying on the same software to carry out their work successfully. The more there are, the more likely that it is the right product for you.

 Joe Gichuki

Joe, a member of ICPAU, is the CEO of Kawai Consulting, a firm that specialises in providing technical and capacity building services to financial auditors. Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Managing Successful SMEs

MANAGING SUCCESSFUL SMALL AND MEDIUM ENTERPRISES (SMEs)

Background:
Like David Richards says, it is not an easy time to be a “small or medium sized enterprise (SME)” owner since the cost of living is high, people are spending cautiously and investors are becoming increasingly conservative. Being an entrepreneur requires worrying about cash flow management among other things to compete effectively.
SME is a business segment term used differently in different countries, sometimes differently in different industries in the same country. In the US, any firm from a small-office home - office (SOHO) to a large corporation may be called a SME.
The European definition of SME follows: "The category of micro, small and medium-sized enterprises (SMEs) is made up of enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding 50 million euro, and/or an annual balance sheet total not exceeding 43 million euro."
In 2008, the Uganda Investment Authority (UIA) introduced the first Small and Medium Enterprises Business Guide. This guide provides information and contacts on business licensing, access to finance, entrepreneurship skills training, business development services, and taxation/incentives.

Challenges of running SMEs
Sometimes in most employees life one gets frustrated at the hustle and bustle and mind-numbing regularity of paid employment. You just want to take initiatives and responsibilities that would bring about a successful enterprise – “your enterprise”. The dream is to be your own boss. But then, it’s one thing to dream, and another to see such dreams materialize to reality.
One of the biggest challenges is the fear of failing. It’s important to appreciate the regularity of salaries/wages and consider scenarios if “your enterprise” doesn’t make it quick or in the intended direction.
Truth be told, being a business owner comes with challenges unique to the size and function of the business. The small business owner, for example, has to handle all the challenges of selling, delivering, financing, managing and growing the business with little or no staff, while trying to make it a success at the same time. This can often prove to be intimidating but not altogether unachievable. No one ever said it would be easy running a successful small business. But then, when you get it right, the rewards can be hugely amazing and remarkable. It should interest you to know that most big, successful and legendary businesses today started off as small businesses.
It is important to retain the interest of all stakeholders like customers, partners, vendors, your best staff and team to build momentum in a short span of time. This takes vision. It also takes courage and belief – belief in your ability to steer your ship to success.
Here are some of the secrets to run a small business that can make these challenges easier to handle and make a successful business venture.
Secrets for SME Success
Secret1: Have a clear vision of what you intend to do and the business you wish to run.
 
Vision is a key hallmark of success principles in business and other aspect of life. Vision gives you a vivid picture of what you want to accomplish. It makes you see the end from the beginning. This picture will illuminate and motivate your mind throughout the course of your business journey. By having a clear vision for your business, the mission takes shape and business objectives and goals emerge.
Secret2: Define clearly what you sell and also to whom you sell or render service
Defining what your business does from the word GO, as you set out into the business world, is always one of (if not) the most important step to running a successful business. This makes it a whole lot easier to manage your company going forward. In addition, this enables you to explain your business clearly, without ambiguity, to investors or partners when the need arises.
Secret3: Source for funds security and sustainability
 
Running a small business requires financial backbone, prudence and efficiency. Explore all available financial options open to you, such as family, friends, business associates, investors, banks, etc. However, the choice of the right financial option for your business' financial plan and support is vital. Also, bank with the right financial institution that will give you the best deals, helps you stretch every shilling and provide for financial prudence in management of the business.
Secret 4: Get business information and technical guidance/advice from Small Business Development Consultant(s)
Today, a number of businesses and professionals give expert business advice and services at a token fee for individuals and groups wanting to go into new businesses or diversify their existing businesses into new areas or line of products and/or services. These professionals provide help and sound business support and solutions services during all stages of the business life cycle.
These include legal advice and consultation, business development and strategies, recruitment and management of staff from business psychologists, and so on. Their business support and development services help business to mature by making the right business calls that won’t only serve in the immediate and short term, but would strategically assist in positioning the business for long term success.
Secret 5: Create a workable business and marketing plan for your SME
 
One of the keys to running a small business enterprise is having a detailed and workable business plan that outlines the objectives, goals, target market and projected growth. In addition to having a concrete business plan, ensure that you work out a detailed business marketing plan to go with it. Without this, it’s necessary to rethink why you are in business in the first place.
Secret 6: Go ahead and start a business
Once you have established the vision and mission of the company, defined clearly what type of products and services your business wants to offer, contacted your financial sources for funding and secured your business funds, consulted business professionals for necessary legal and business strategy building aspects such as registration, documentation, business structure processes building, then finally built a creative and detailed business and business marketing plan, to drive and carry the business, it is now the time to start! Don’t waste another moment idling and wishing. Just start!
Secret 7: Build a strong brand identity that will stand the test of time
Actually, branding the business should start the very moment you articulate and conceptualize the business idea. This involves creatively building a business identity that would appeal to the target market in a continuous manner. It includes but is not limited to the choice of business name, type of business engaged in; and the personality you want the business to have. Be very creative and innovative with graphic designs, business colours, taglines, business logos and other communications. Everything must be organized and attractive to the targeted customer to bring about more sales and continued business patronage.
Secret 8: Prioritize on making profit
It’s amazing how many times people start up business enterprises and then forget how to make profit. It is a known rule in economics that the chief aim in business is to make profit. When that is no longer the case, it becomes difficult to sustain or grow business. Therefore, the moment a business is set out to be successful, it’s important to understand the golden rule of money - “make sure more comes in than goes out”. Once this is achieved, there will be enough to re-invest in the business and to make you feel it is all worth it going into business.
In addition, prioritizing profit making also involves optimising cost management to minimise waste, maximise productivity and profitability. Where you can’t seem to get it right yourself, hire or consult an accounting professional to help you keep your books in order, manage your finances properly and professionally to ensure your business remains profitable!
Secret 9: Network and connect with other businesses and business minded individuals as much as possible
To grow business for a wider reach and approachability, ensure you network with other local small businesses and small business owners on overall business vision, shared business strategies and opportunities. Attend regular business events; they present great opportunities and avenues for small businesses to come together, rub minds, share business ideas and experiences. Also, join small business associations and participate in local events to raise awareness, promote your business and its brand.
Secret 10: Never leave a single customer dissatisfied
 
It may be very difficult to keep every one of your customers happy. That is a business fact. But you must try to keep every one of your customers satisfied. That should be your business reality. Having a pro-customer orientation – whether you run a small business alone or have employees working for you – is as vital a decision as the decision to go into running a business in the first place. There can be no business without customers. The more customers patronize your business, the more the chances of making a profit, and actually building something successful and wonderful. Therefore, businesses must emphasise customer satisfaction through effective customer service and relation. Make use of positive and negative feedback from customers to improve the quality and desirability of your products and/or services.
Secret 11: Be Passionate about your business and commit to continuous improvement
Never settle for less. Always go for more. Renounce average. Beware of comfort. Avoid complacency. Live by belief. Every day you should desire your business to be in a better position than it was yesterday. This mindset should permeate through you to your staff. Even when hiring, ensure focus on those who can do more, bring more, create more, live more, give more, sacrifice more, believe more, support more, relate more and accomplish more. Emphasis should be on more, more and more - constant improvement, no room for stagnation and redundancy. Remember, most of the iconic businesses you see today like Coca Cola, Apple, etc. didn’t start big. In fact, most of the Fortune 500 companies started small. But they made it to the top because they keep going and keep improving and wanting to be better. They still do today, and some of them are over a century old. You too can do it, if you try and believe you can!
Secret 12: Feel the winds of change in the air
To be a successful business, you need to be able to change and adapt your products and services as situations dictate. What was successful last year may not work for you this year.
Be ready to try new ideas, expand your business and bring in new people. In order to fuel such radical changes, you may well need to consider exploring new avenues of funding in order to enable your growth. A measured risk often pays off in business growth.
Secret 13: Taste the exotic fruit of unexplored markets
If you are looking to grow and expand your business, you may not find enough clients with money to spare in the existing markets.
This could be the year in which you reach out to new markets, bringing in eager new clients and taking your goods and services into territories you’d never considered before. Consider expanding geographically as well as into new niche areas of business.
Remember, running a successful small business may be tasking and at times just plain frustrating, but the eventual rewards of running a business successfully are too numerous to mention. The benefits you reap ultimately will be boundless. And the financial rewards? Well, you may just turn out to be the next Aliko Dangote or Bill Gates!

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