Having a great idea for a business can be the starting point for an amazing journey. That â€˜eureka momentâ€™ can lead to you jumping swiftly out of your metaphorical bath to tell your friends, relatives and neighbours the benefit of this amazing new idea that will revolutionise the world as we know it (possibly).
But ideas are one thing, and delivering on your business ambitions something quite different. Have you thought about how youâ€™ll actually run your business? Have you thought about the financial aspects and how youâ€™ll get the funding to start, evolve and grow your fledgling enterprise?
Our advice is to involve an accountant or business adviser right from the start of your business journey. And hereâ€™s whyâ€¦
Enthusiasm doesnâ€™t pay the bills
A lot of people come up with great business ideas. But not many people think through the actual process of how their new business will work financially.
The aspiring entrepreneur or newbie start-up owner tends to focus on how great their idea is rather than taking a measured approach to the financial side of the business. And this very quickly leads to trouble.
Without any real planning or budgeting, people go off and start spending money on R&D, advertising and marketing.
They start spending money before theyâ€™ve worked out how theyâ€™ll earn any money â€“ and this can be fatal for a business thatâ€™s not yet bringing in a stable pipeline of income.
Itâ€™s only months later, much further down the line, that the aspiring owner thinks about bringing in an accountant, and by this point the situation can look problematic, to say the least, and occasionally extremely dire for the future of this enterprise.
You need professional advice sooner rather than later
The trap for new entrepreneurs is to think professional advice is surplus to requirements until theyâ€™ve been up and running for a while. But this misunderstands the importance of a solid, practical financial foundation for aÂ business idea.
By the time youâ€™ve been running for a few months, the cracks in your foundations are usually already starting to show and you can find yourself in financial trouble that will take a lot of complicated undoing to put right â€“ and all because youâ€™ve not thought through the financial planning of the enterprise.
As and when an accountant is finally brought in, it can be to deliver some potentially quite disheartening news about the financial health of the owner’s amazing new start-up. The accountant can often end up having the tricky job of explaining that the business isnâ€™t actually a viable financial proposition. And no owner manager wants to hear that kind of news!
Talking to an expert at the start really does pay off
Itâ€™s very hard to correct the mistakes made early on by a business.
Weâ€™ve been advising small businesses and start-ups for years, so we know the potential challenges youâ€™ll face to get your great idea from the drawing board to the shop window. And because weâ€™ve been around the block a few times, we can bring these years of experience to bear on your business idea.
We can tell you what will work and what wonâ€™t work. And thatâ€™s absolute gold dust if youâ€™re just starting out with a new venture in a new market.
We can help you:
- Decide on the right business structure for the company â€“ should it be sole trader or limited company? Would it make sense to create a partnership etc?
- Find access to the right funding â€“ will a bank loan suffice or will you need to look for private investment or even crowd funding?
- Get the right financial systems in place â€“ have you thought about accounting software to record and monitor your finances or how youâ€™ll invoice customers to bring in profit?
- Make enough money to cover your overheads â€“ how are you monetising your idea? How are you going to find customers, convince them of your productâ€™s value and get them to part with their hard-earned cash?
Prevention is always better than cure
Having a practical financial plan in place really will pay dividends in the end.
In essence, talking to an adviser early means that the accountant is there before the concrete of your foundations sets. If youâ€™ve built your house on shaky foundations, itâ€™s not too late to start again. But if you try resolving your issues further down the line, those foundations are now hard as concrete and very hard to move.
Prevention is always better than cure. In much the same way that visiting your dentist frequently results in sparkling gnashers, talking to your accountant early and regularly can really help you prevent the rot and keep your shiny new business idea healthy and ready to grow.
So, where are you now?
If youâ€™re thinking of setting up your own business, please do give us a call or drop us a line to talk through your business plans right from the outset.
Already have an accountant? Itâ€™s really not a major complication to change your accounts to us.
You can also find out more about our options for offering you an outsourced finance director service to drive the success of your new enterprise.
We wish you all the very best in your exciting new venture.