Launching your first startup – it’s a courageous, challenging, and inspiring journey. After all, there is nothing quite like starting your new venture and becoming an entrepreneur.
It’s also an incredibly tough time for entrepreneurs with many challenges to face and lots of questions to consider.
The founders behind many successful startups often go on to launch numerous businesses, taking the lessons they learn along the way into their latest ventures, developing and adapting their business strategies to new sectors. But what would they wish they knew before launching their first startup? We have put together a list of top 5 financial and accounting tips that startups across Essex can benefit from as early as day 1:
- Choosing the Right Business Structure
Ensuring you have chosen the most appropriate business structure is crucial from legal and accounting perspectives. What is meant by business structure? This refers to whether your business is defined as a sole trader, partnership, limited liability partnership or limited company. There are advantages and disadvantages to each structure depending on what your business looks like, so it’s recommended that you speak to an advisor to find out more. Whichever business structure you decide to be, you will have to register as this with HMRC.
- Establishing a Business Bank Account
Another highly recommended action that can be overlooked by sole traders in particular is establishing a business bank account. Having a bank account that is separate to your personal finances ensures that there are no confusions in where your money belongs. Your business bank account will help you organise your funds and provide an invaluable record of your financial transactions.
- Getting the Most Appropriate Source of Finance
How will you fund your venture? If you’re not bootstrapping your startup, you will need to consider other sources of finance, such as angel investors, venture capital, bank loans or crowdfunding. The best source of finance for your startup will depend on your requirements, so it’s recommended that you speak to an accountant or financial advisor with experience in business startups to help you make the right decision.
- Move to Cloud Accounting
From its time-saving abilities to improving the security of your financial data, there are many reasons to move to cloud accounting. For startups, cloud accounting software is renowned as being particularly easy to use and is ideal for those working with other co-founders as collaboration is a cinch. Not only can you access your figures wherever and whenever you need to, your partners and authorised employees can too.
- Hire New Staff Wisely
Although this might not seem directly related to your startup’s finances, making the wrong decision with regards to personnel could be costly in the future. If you need to bring in more staff to effectively launch your startup, consider opportunities for virtual assistants or remote workers to keep your overheads to a minimum. It’s also worth looking for employees or remote workers that have complimentary skills to you to help effectively balance your tasks for maximum efficiency.
It’s essential that you give your startup the best chance of success in an increasingly competitive market, so making sure your finances are managed well from the start will help you in the long run. For more advice on getting your business off the ground, speak to an accountancy or financial advisor.
About the author: TBL Accountants is an independent firm of Chartered Certified Accountants serving businesses and individuals in Southend and the local area.