Thinking of starting your own business? Here’s three things that you should probably think about before taking the plunge:
Get your accounts systems in place
No matter how big or small your business is, you’re going to need an accounts package where you can input your transactions and track your client activity.
An easy-to-use accounts system is particularly important to ensure that you meet all legal and tax requirements for the jurisdiction in which you’re operating.
You can also use your accounts system to manage your payroll and human resources requirements.
Opt for a cloud-based system that enables multiple users to access in real-time – this ensures maximum accessibility and flexibility as your business grows.
Ensure that you’ve got sufficient finance
Most people start their small business by using their own savings, some finance from a bank, and possibly some investment from family and friends or an angel.
Having the right type of finance in place is essential for ensuring that you’ve got sufficient resources to get your business up and running as well as providing you with a platform for growth.
When you’re looking at the finance options, talk to your bank about the different types of facilities that they might be able to make available to you. A bank account and a credit card will be essential, but will you need an overdraft? Or working capital loans? Or something a bit more sophisticated like invoice financing?
Try to ensure that you are giving yourself as much flexibility as possible – plan ahead and have all the available financial tools open to you before you actually need them.
Understand your cash-flow
Even if you don’t have a lot of experience in financial management, you’re going to need to have some basic systems in place to ensure that you have sufficient revenue coming in to your business in order to meet the obligations that you need pay.
Most accounting software packages will provide you with a cash-flow management tool, but you can also manage it via a simple spreadsheet. Project three months in advance, split the spreadsheet into weeks, and then map out the revenue that you’re expecting to receive and also the bills and expenses that you will need to pay.
You can match this against the funds you have available in your bank account or credit facility to ensure that you’ve got sufficient turn-0ver to keep your business running.