Posts Tagged ‘Financial reporting for start-ups’

Straight-talking start-up advice

Tuesday, November 14th, 2017

Starting a new business can be a very exciting time.  But before you jump in, take some time to ask yourself some simple questions:

  1. Why am I doing this?
  2. How much money will I need?
  3. Where will I get that money from?
  4. Who will buy from me?
  5. Who are my competitors?

Once you know the answers to these questions, you have a potential business.  If you don’t, then do some further planning and research as there will undoubtedly be outside influences to overcome to be successful – make sure your business idea is crystal clear.

Barriers to growth

Some of the most common barriers to growing your business are:

  1. Proving your products and services work and that there is a real demand for them
  2. Proving a sustainable business model that allows your products and services to evolve
  3. Knowing whether your business is scalable
  4. Lack of awareness of your marketplace

Produce a plan

Next, you’ll need a strong business plan.  This is vital and should clearly show the steps required to be successful.

Research shows that 67% of companies that fail do not have a business plan, but those that do are 12% more profitable.

And right from the start, you should ask yourself: what’s my endgame? This is something any investors in your business will particularly want to know.  For example, do you really want to run your business forever? Or might you want to one day sell it, or maybe grow it big enough to float your business on the Stock Exchange.  What would you want to walk away with and what comes next?

Your business plan should then focus on your value proposition – what service or product will make your business attractive to customers?

And what exactly is required to make it happen? Where will your market be and who’s your competition?

A vital part of your business plan is to include a financial model which is driven by key performance indicators (KPI’s).  KPI’s can show the initial investment required, breakeven points and how profit will increase with further growth, and when further investment or support is required.  There should also be some milestones at Years 1, 3 and 5 too.

Consider too, how many staff you will need with a clear action plan for who has responsibility for what, and the expected timescales involved so that there is full team buy in.

Anchor Clients

Anchor clients are the cornerstone clients for your business and they normally provide as much support to you as you do to them, trialling new products and services and offering healthy feedback.  The income they generate is also useful!

Implement reporting

At Tree Accountancy, we support our clients in developing and implementing important tools used in the financial reporting process, and your investors will also expect to see (and be reassured by) professional accounting expertise in place.

We can help you regularly review your position against plans made and financial targets put in place to keep your business on track.

We also ensure HMRC and Companies House registration compliance which can be complicated and time-consuming.

To achieve robust financial reporting, we offer a complete and expert accountancy service designed to expand with your business.

We even take into consideration future enhancements such as ‘Making Tax Digital’ – a whole other area of accountancy expertise which will affect your business before too long.

For further information on our services or to talk to one of our experts, please email kate@treeaccountancy.co.uk