Posted: Tue 26th Nov 2019
Starting a business is never an easy process, even for the most positive and confident entrepreneurs. Kirsty McGuckin, Enterprise Nation member, director of the Edinburgh branch of Bracey's Accountants and ICAEW chartered accountant, shares tips to help start-up businesses get on the right path to success.
When it comes to starting a new business, having a unique and innovative idea is just the start of your journey. As an ICAEW chartered accountant, it is my job to ensure that a project is financially sound and has a realistic chance of succeeding. We really want you to achieve your goals, and we know careful planning is essential to avoid any potential pitfalls along the way.
Support during the initial start-up phase is essential and being able to run your business plan by a professional and get their opinion and insight is crucial before any potential external finance is sourced.
There are a huge number of factors you need to consider as you start out, such as:
What costs will you be incurring during each stage?
How much have you budgeted for advertising and a marketing strategy?
What is your pricing model? Will this cover any costs of supplying the goods or services you intend to offer?
Is investment required in capital assets, such as till systems, office equipment, plant and machinery?
Will you need to be earning a salary during this start-up phase? Will you need to employ staff?
These examples are just a passing glance at the vast array of questions you'll need to answer as you launch and then grow your business. Perhaps
the most important factor you need to think of when starting a business is how you're going to finance it. Can you finance it yourself or will you need to consider external financing options?
This is where support is key. Speaking to an ICAEW chartered accountant or adviser about your business plan will give you the best chance at securing any external finance you may require. As professionals, your chartered accountant or business adviser will be able to ensure your business plan isn't just presented properly but also correctly answers the questions you'll be asked.
To be able to attract outside investment, if required, you'll need your business plan to be able to clearly present your plans and answer any questions someone looking to invest would have.
Once you have the financial plans in front of you, you should consider how you are going to be set up. The most common set ups are that of a self-employed individual or partnership, as well as limited companies and limited liability partnership. Each option comes with its own tax rules and compliance obligations, so it's important to ensure you understand how each scenario would impact you both financially and legally.
When you're ready to take the plunge and launch your business, you'll need to continue to plan and monitor key performance indicators (KPIs) to allow you to maintain a comprehensive idea of whether you're achieving your goals and, ultimately, going to be profitable. Without knowing how your business is currently performing, you'll be unable to properly plan for the future and achieve the financial targets you've set.
Maintaining your accounting records on cloud software such as Xero enables you to run regular detailed reports such as monthly profit and loss compared to a previously set budget so you can see what is working and what isn't.
Monitoring this information regularly not only helps you to track your progress against your original goals, it also allows you to identify areas where particular alterations may be needed to be made to help your business fulfil its potential.
A stitch in time could save your business. Spotting a problem something early enough gives you the best chance to finding a solution. If there are any aspects of starting a business that you're unsure of, speaking to a professional will not only provide you with peace of mind, it will also ensure there isn't something you've overlooked.