Andrew – Page 8 – Financial Memos

Many people are eager to take the plunge and start working for themselves. For many, the idea of starting up a business is a very tempting one. However, setting up a start-up business can be a real challenge. It can be pretty daunting, especially if you think of the financial climate and the big players' many niches. The good news is there are ways you can make the whole process more accessible, more manageable, and less stressful. You can always do some small and simple things to help your startup business grow and flourish. The Nature of Your Business If you are keen to get involved in setting up a start-up company but are not sure what sort of company you want to set up, take time to consider what will work best for you. Think about factors such as gaps in the market, possible competitors, whether you can run the business online and offline, your knowledge and skills, and what sorts of costs might be involved. These will all play a big part in the viability and likely success of your startup. Create a Business Plan You should do this to clarify your goals and aims to yourself and those you may be approaching for help, such as your bank manager! It is essential to create a good, solid and comprehensive business plan outlining your plans and your goals. A good business plan will be a vital business tool as you are starting along this path. Base your business plan on solid and thoroughly thought through assumptions, different scenarios and their possible outcomes. Don't get too excited too early, especially if you believe that around 70% of the start-ups are doomed to fail. An essential part of developing a business plan is the questions you answer along the way. The plan has to address some pretty tough questions. Check out our article that gives you ten of the top questions you need to answer; these must be in your business plan. Your Identity and Brand Even as a small start-up business, having a business identity and brand can be invaluable. You will need to think up a name for your business. But you can also look at logos, taglines or slogans that will help your business stand out from the crowd. Creating an identifiable and easy to remember the brand is as valuable as your products. Your Online Presence The internet is vital for businesses these days, and with the popularity of the worldwide web, an online presence is crucial even for smaller companies. Think about getting a website set up, even if it is a basic one to start with. You should ensure that you get your site populated with valuable content, make it look professional, and make people want to stay on your site and make a purchase. Consider Your Financing Options Most start-up businesses will need at least a small injection of cash to get started. Unless you have plenty of savings stashed away that you plan to use, you need to consider your business finance options. Make sure you think of a few options rather than just focusing on one, as this way, you have other options available if one doesn't work out. Do Your Market Research You must do your market research no matter what sort of product or service you are selling. It would help if you looked at the demand for your services and products and look at the competition, as this way you will know what you are up against. And part of that market research is going to be around pricing. Where is your offering going to place in the market for quality, customer service, and of course, price? We have an article looking specifically at five issues we suggest you consider in the price decision. Promote As a start-up business, you won't have the big marketing budgets that large, established businesses have, but you can still get the word out there about your business. Make use of social media such as Twitter and Facebook, join relevant forums and contribute, put blog posts on your site, and even resort to old fashioned leafleting to get the word out in your local area. You can also consider advertising on other more established websites, where you can look at options such as pay per click. Be Committed While you may think running your own business means you are the boss. It will be your business who is the boss to start with! To make your business work, be prepared to commit a lot of time and effort. This will mean your social life takes a back seat for a while. But it will all be worth it in the end! Get an Accountant Unless you have a good head for figures and are confident about doing your accounts, get an accountant! It is worth considering an accountant for at least the first year of your startup. You will have enough to be getting on with without having to stress about taxes and financial details. Look for an accountant with experience when it comes to working with startups. We have another article that looks at how an accountant can help a small or new business; you can find that link here. One of the most significant issues for new firms is cash flow. Many people think the big problem is profitability. But no, it's the running out of cash to pay the bills that do many small businesses in. An accountant is someone who can help manage cash flow, along with you having a good handle on your costs. Overheads, in particular, can get away from a business, and we have an article that may help better manage these when starting. Be Prepared to Invest It is a great feeling when you are starting to see a little money coming in from your own business. However, you need to refrain from getting online and booking the first flight out to the Caribbean to celebrate! To begin with, focus on re-investing in your startup, using the money you make to help your business grow. You can start to enjoy the high life later on when your startup becomes a huge success! Some businesses will seek external funding early on in the form of seed funding. We have an article that looks at the early funding process, pre-seed funding, and available sources to the new business owner.