The Start-up Stage
So, you have a great idea for a business and want to bring it to market. Where do you start? Well, all businesses start with an idea, and while all ideas are unique, the process for transforming them into a workable business follows well-trodden path.
Ultimately, that path takes you on a journey through the four primary stages of the business lifecycle:
Here we focus on the challenges you face in the initial stages of transforming your idea into a reality. The startup phase.
Common Problems Faced by Start-ups
1. Not knowing your Market
Knowing your market is critical if your business is to survive. But what does this mean? Well, at it’s most basis level, a market consists of the customers for your product or service. But it also includes competitors and suppliers.
You should aim to carry out extensive research on all aspects of the market to build what business analytics call ‘market intelligence’. This will help you to identify what customers in the market are looking for and where the competition falls short.
This information can then be used to tweak your product or service to position it more effectively to capitalise on competitor weakness because the more focused you are on delivering what your customers want, the more successful you’ll be.
2. Not having accurate budgets
Creating accurate budgets is one of the most important aspects of developing a viable business plan. Many inexperienced entrepreneurs underestimate the costs of setting up their business and often run out of cash before they get started.
Make sure you create detailed budgets for the following start-up expenditure:
- Facilities – Office and warehouse leases, fit-outs and renovations
- Capital Expenditure – Fixed assets such as furniture, stock, computer equipment and vehicles
- Materials and suppliers – Office stationery, advertising budgets and marketing materials
- Other costs – Professional fees, licenses, permits, broadband, and insurance
If you need help creating accurate budgets, we can help by providing you with detailed assessments for startup expenses.
3. Running out of capital
Running out of cash is one of the most common reasons why start-ups fail, so you should take the time to develop accurate cash flow statements for a period of at least 12 months. This will highlight exactly how much cash you need to generate to stay afloat.
This statement can then be used to find alternative sources of income during periods when cash is expected to be tight. Several options can help here, including overdrafts and invoice financing.
We can help you create accurate cash flow statements and provide more information about the various forms of business finance available to help support your business during this critical early stage.
When a business starts sometimes the end game is not always clear. The team at Accounting Professionals work with start-up businesses and new business owners to identify what they want to be known for what products and services they should supply, to which customers, for what prices, using what resources, through which sales channels and establish a clear value proposition for the business.
Whether you trade as a sole trader, partnership, trust, or company will depend on a range of factors including:
- Income Tax
- Capital Gains Tax
- Business partners
- Cost of establishment; and
- Risk of legal liability
The team at Accounting Professionals will identify the best structure given your circumstances and advise when it may be time to review your structure
We can review your proposed or existing pricing structures/model and advise you on:
- Whether the pricing model will generate enough profit and cashflow to ensure the business is financially viable
- Discuss different pricing models to increase profits and sales; and
- Review the potential for different pricing models for different sales channels ie pricing for online sales and shop front sales.
We review the best worker model for your business and industry. Business growth and profitability can be impacted significantly depending on whether the business relies on full-time employees, casual or part time employees, contractors, or business associates.
At Accounting Professionals we can advise you on the tax, contractual, government incentives and financial implications of the different worker models.
Being a start-up business ourselves 25 years ago and advising 100’s of successful start-up businesses since, we understand the ingredients to take a start-up business from small beginnings to either sustaining a family or building multi-million-dollar enterprises, depending on the goals and aspirations of the owners.
We work with you to understand your goals for the business and proactively work with you to achieve these goals.
If you have an accounting system in place our team can provide training, so you are getting the most out of your system and it is always accurate and up to date.
If you need assistance in choosing a system, then we will advise the system that is best for you and your business after considering your industry, what you want to do on the system and your financial budget.
We will review your current tax structures, including the way transactions are structured and completed to ensure the business is gaining the maximum tax benefit and accessing all the government incentives available.
For start-ups we have experts in the R & D concessions and ESIC entitlements to ensure the business is structured correctly and all your record keeping is accurate and up to date to maximise any incentive claim.
As start-up business experts we will identify the latest state and federal government incentives available to your business and industry.
We act as an independent sounding board for a business marketing strategy and plan and make recommendations about potential target markets, provide introductions to other businesses, and seek advice from our consultant marketing and branding consultants where the need arises.
We are always pleased to review the financial budget for marketing to assess the benefit and ROI on marketing dollars spent.
The most successful start-up businesses have clear financial goals that identify the income to the business and the outgoings, generally for a period 12 months in advance.
A financial budget will allow the business to confirm the initial capital and income needed to survive the first 12 months, often the most vulnerable time for many businesses.
We can assist in preparing the business’ first budget and identify the key numbers the business needs to focus on to be successful.
We are small business tax specialists. Accounting Professionals support you to ensure you lodge tax forms and pay tax on time. Our team can keep you abreast of tax obligations for:
- Income Tax
- Capital Gains Tax
- Payroll Tax
- Land Tax
- And more
Advice to supercharge your start-up
One of the most important things you can do when developing your start-up ideas is to seek professional advice as early in the process as possible. This can help you to avoid most of the problems associated with start-up failure.
At Accounting professionals, we’re experienced in working with clients at all stages of the business life cycle. We are business finance experts with years of experience helping entrepreneurs bring their ideas to market. We can help you formulate budgets, develop cash flow statements and provide information about the financial support available for fledging businesses.
We will empower and support you to make the choices that are right for your business.
Get in touch with us today by completing that contact form here or call us: (02) 4297 0066.