Nowadays, starting a business can cost quite a large amount of money, often in one lump sum that is not always a viable option. There are a number of tricks one could use to make sure you are starting your business in the correct manner, growing and developing at a rate that is going to ensure your financial stability.
Don’t quit your day job to venture off into unknown territory.
It is so important to have something to fall back on when venturing into the unknown territory that comes with starting up your own business. If you have the fortune of being employed, don’t rush into giving your employment up to try and start off on your own. Starting a business takes hard work and time and so it is advised that you work on your venture during your own time, developing your products and services, testing them and gathering customer feedback before you can be sure that it is going to take off and provide you with the income and financial stability that you need.
Ease into business gradually to ensure you don’t fall off the employment train.
By gradually starting your business, it is possible to reduce initial start-up costs as you slowly build up sales and ease into operation. Be smart about this, start off by putting effort behind products that require less groundwork or capital expense and get your cash flow going, saving whilst you grow. This will enable you to begin venturing into new areas whilst continuing to generate sales rather than running at a loss.
Don’t launch until you have proper systems in place.
Invoicing, customer-care, record keeping and book-keeping systems are important to ensure a proper, smooth-running business. Making sure you have these systems in place before you launch will provide you with peace of mind and save you time as you will need to focus on the business at large putting effort into acquiring new customers and ensuring a successful launch into the market place.
Protecting yourself as well as your business is vital for its success and your sanity. With start-up costs being so high and many people attempting to start up from ground zero, often enough the start-up costs are funded by friends or family which can lend itself to problems.
Borrowing money from those close to you requires a diplomatic and formal approach, just because they are family or friends does not mean that the loan or agreement should be taken lightly.
Do not be relaxed when it comes to financial agreements with personal relatives or friends.
Dealing with family or friends can make discussion around financial matters rather awkward and so it is imperative that there is a formal and professional written agreement between you and said party. This will not only ensure all of your bases are covered but will also lend to the relationship that is on the line should something go pear shaped.
Do not ask family or friends for an amount that is far beyond their means.
Respect is important, especially when there is money involved. Be sure to ask for an amount that is suited to the lender as opposed to making sure it is suited to you and your needs.
Be transparent with where the money is going and what it is being used for.
Endeavour to keep your friends and family who have lent you any money up-to-date with the financial situation your business is in as well as its successes and failures. Transparency is key and sharing this with those who have assisted you in anyway is beneficial to you.
If you are in need of financial advice or assistance in the above mentioned areas or any areas related to the finance industry, PATC( Professional Accountants and Tax Consultants) are here for you. Feel free to give us a call for any advice, queries or concerns you may have.