There are many possible tips that a startup might do well to take on board: For instance, devising a business plan and trading structure, having sufficient reserves of cash on hand during the first year or so, or perhaps establishing a plan to deal with sluggish debtors hampering your cash flow.
Perhaps more important than all of this is to start a relationship with a quality accountant. Here are a couple of reasons why.
Startup business owners may not be financial experts
Just because you know how to get a new business off the ground doesn't mean you're an expert on more complicated, niche accounting subjects. The recent Intuit Financial Fitness Test found that 58 per cent of startup company owners couldn't correctly answer questions about common accounting concepts and terms like capital structure or depreciation. The group that performed best were baby boomers, and even then this group only had a 63 per cent pass rate.
Don't let your business flounder due to overconfidence or pride. Hiring an accountant to take care of these matters will not only help ensure your business doesn't make any wrong moves, it will also help you pour your focus into how it's running.
Accountants can help your business get off to a great start
Accountants don't simply exist to answer your questions about taxation, as we've mentioned before, though they can certainly give you guidance around minimising your tax while running your business. Your accountant is also someone who's dealt with individuals in your situation many times before, and as such will be able to use that experience to advise you about what to expect.
From working out a startup budget to determining the most effective cash management strategies, your accountant could well be the key individual to talk to. Don't forget, too, that investors are more likely to be attracted to your business if you can provide accurate and well-presented financial projections, cashflow analysis and business stretagy, something your accountant together with a corporate finance team can assist in preparing for you.