A big part of what we do as accountants aren’t the adding up, but the business advice that makes a difference. I thought it would be a good idea to put some flesh on the bones of the old adage ‘Cash is King’. This advice is timeless – and is relevant to anyone looking to startup a new business.
It can be great having super new office furniture! Or renting a prime location on the High Street. But check out your options. What is the best deal? Can you buy smarter? Sometimes the answer is it is best to get new furniture or new vehicles and that prime location. Other times used furniture or used vehicles and a location in a trading estate will be the way to have the best buy.
Get your initial startup capital sorted early
A business startup is going to cost money. So before you get going you need to get your financing sorted. Firstly, it can be pretty easy to remortgage to fund your startup … but only if you do it whilst you have a good-paying job! Once you have left work and started the business it is too late as you have to wait for a set of accounts showing a profit! Secondly, avoid using expensive credit cards. There are always lenders out there who will be cheaper than putting spending on your credit cards. Thirdly, using asset finance is often an inexpensive way to get equipment or vehicles.
Don’t go old-school! Technology really can be the answer to keeping your costs down whilst at the same time having a good answer to some of your business’s operating problems. VOIP phone systems, cloud-based record-keeping apps, smart ways of taking money from your customers, online order-taking, etc. Each of these is a way to work smarter not harder whilst at the same time bringing convenience for you and your customers.
Don’t go DIY
When you are starting up in business it is very tempting to ‘do it yourself’ rather than delegate to an expert. Often the cost of a professional; your accountant, solicitor, web designer, graphic designer, copywriter, etc., can seem like more money than you want to pay. Yes, using a professional expert will cost you money – but, and this is often a hard lesson to learn, the cost of getting it done properly the first time is often really worth it.
Firstly, you are going to save time by delegating to experts. Secondly, you get a proper job with some comeback. Thirdly, the true cost of doing it yourself is often that you end up doing something wrong. Avoid the cost of mistakes, and get a proper job with peace of mind by delegating to an expert.
Don’t barter your startup business away
Business owners often find ways in which they can barter their services with another business owner. It can be really good to operate in a barter economy …for a small part of what you do. But how do you value your respective sides of the deal? More importantly, you will have real bills to pay and how can you do that if you aren’t getting hard cash in payment? If you are going to do this, always remember to agree on what your service is worth and issue an invoice for your work-and expect an invoice from the other side as well.
Going green isn’t just good for the planet, but is often good for your business finances as well. There may well be marketing opportunities in having a green eco-business. From a financial point of view, it’s more the reduce and reuse part of going green that is relevant. Energy in all its forms is expensive, so how can you reduce your energy needs – from the outset by design? What else can you do to be greener, leaner, and more efficient all across your business?
Hire staff carefully for your startup business
Perhaps I’m stating the obvious here – but the point is don’t rush into this. Firstly every business that isn’t just a job for the business owner needs staff, so you are likely to end up hiring people. But don’t rush in and get anybody and don’t rush in too quickly. You need people who are enthusiastic about your business, but also who are the right people for the job. Getting the first person who is convenient often isn’t getting the right person.
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