Startup Basics: 5 Tips to Master the Fundamentals
As a startup it’s easy to get so caught up in the excitement, the product, the service and the marketing that you forget to focus on some of the fundamentals of beginning a business. Getting these foundations right though from the start, will serve you well as you progress on your business journey and down the track you’ll thank yourself for it.
Here are my 5 startup tips to get the fundamentals right from the beginning:
1. Are you a Sole trader, company, trust, partnership?
There are so many options how do you know which one is right for you? Before you start signing contracts or trading talk to your accountant and ask which business structure they recommend for the size, type of business and your expected turnover.
2. Have you got your business set up professionally?
There are so many things to consider when you are setting up your business and all too often I see clients’ weeks or months after they have been trading and they don’t have any of the right registrations. Your accountant can help you ensure you are getting the right registrations for your situation at the right time. Registrations may include ACN, ABN, TFN, GST, PAYGW, FTC, FBT, business name and more…. having the wrong registrations can cost you money in fines as well as unclaimed refunds & entitlements.
3. Avoid creating an administrative headache by implementing a simple system to manage your financials.
Every business is different and making sure you get the right system for your business is crucial. By all means speak to your accountant for recommendations but if they only deal with one product be sceptical. The system you use needs to be the right system for you not what works best for your accountant. Financial systems are used for 2 things.
Firstly, for you and your accountant to prepare compliance returns such as the BAS or tax return. Secondly, and arguably more importantly, your financial system is there for you to manage how your business is tracking on a day to day basis and help you understand why. There are many systems out there but in the beginning it’s a good idea to look at a simple, easy to use system such as MYOB’s cloud product Essentials.
It contains all the things most startups need and even includes payroll with unlimited transactions, no upfront costs, no long term contracts only a month by month subscription.
4. Make sure you have worked through your numbers by preparing a budget.
So many people tell me they can’t make a budget because they don’t know what is going to happen – that is exactly the reason why you need a budget. Estimate of what you think your revenues are going to be and then list expense by expense what you will need to pay out each month in order to make that revenue and just run your business. That will give you a good starting point to measure yourself against & a heads up on what profits or losses you can expect.
5. Surround yourself with other business owners.
As a startup you have a lot of lessons to learn and the quickest way to learn them is to share experiences with other business owners. Everyone thinks their business is unique – you’re right it is unique just like every person is unique. However, if you break it down the fundamentals of every business is more alike than they are different.
Ask your fellow business owners what worked for them and what failed dismally. You will find that most businesses owners are more than happy to share their experiences & business learnings with you, lessons you can’t learn at university.
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