Whether you’ve set up a Shopify store selling customised nose rings, have a gorgeous boutique selling lust-worthy clothing, or have a new app that’s set to take on the world, there’s plenty to think about when it comes to running a business. There’s also plenty that can be overlooked.
The baffling sea of information can also be overwhelming, especially if you’re a creative ideas person, and not so much the paperwork person (speaking from personal experience here).
As a new business owner, one of the best things you can do is ensure you set up your business correctly from the start.
One way to make sure this happens is to get an accountant on board to help you. Mine has been invaluable!
You may not even be aware of the ways in which they can assist you, so the fabulous folks over at Perks have prepared some pointers to tell you exactly how to make sure you’re giving your business the best chance at success.
Your Business Structure & Plan
Understanding how to structure your business is an important conversation to have with your accountant right at the beginning. Getting this right from the outset can avoid costly re-structuring processes down the track, will assist you in understanding the risks involved in your new venture, (how best to protect your assets) and lastly, will ensure that you are operating your business with maximum tax efficiency.
Your accountant can also assist you in putting a business plan together. Your business plan should identify what you are going to do, how you are going to do it, and your time-frames for action. It should include financial and non-financial information and should be updated regularly because not only does it provide you with crucial information internally, but can be used externally for various stakeholders, such as financiers or investors who you may need funding support from down the track.
Cloud Accounting & Reporting: Make sure you invest in the correct financial technology for your business
We are lucky to live in a time where innovative technology is very accessible, which can have a huge impact on how your business is run, from the simplest of processes such as automating the generation of invoices and follow up statements for your customers or integrating your point of sale system to your accounting system, to much more complex issues. Your accountant can advise you on what cloud accounting software to implement based on your specific needs, helping you to navigate through the many choices available, saving you time and getting your business systems up and running a lot sooner! Best still – your accountant can also train you on how to use the software so that you don’t need to keep paying someone else to manage basic processes. If your adviser has access to up to date data on your business performance, they’ll be able to provide more relevant advice in a timely manner too.
Another huge benefit of cloud accounting is the reporting capabilities you gain. Many business owners fall into the trap of thinking that because they are making a profit, their business is doing fine. But – you need to ensure that you fully understand your balance sheet, your profit and loss statements and importantly your cashflow position. As a business owner, you need to understand the cash requirements of your business so that you aren’t caught short when you need it to pay for things like stock, bills and staff wages.
Your cloud accounting set-up can assist you in producing all of these reports so that you are on top of exactly what is coming into your business, what your outgoings are, and clarification on the timing of your upcoming financial obligations (including employee super, PAYG and GST obligations) so that you can plan for them, while at the same time ensuring that you have a clear understanding on how much working capital you have available to keep your business growing.
Budgeting & Forecasting – Make sure you know where your money is going and where its needed ahead of time to allow growth
Forecasting where you want your business to head not only assists in the management of your business, it also provides your existing or future employees clarity around key milestones and your financial goals.
When starting a business there should be a number of scenarios you are working from, i.e. best case, worst case and most likely. It is often hard to gauge what is actually going to happen, however, there are a number of tools and assumptions your accountant can assist you to formulate.
This process not only assists you in documenting what your expectations are but also identifies how likely you are to obtain them. Sensitivity analysis can be performed, helping you to understand what the key drivers and metrics for your business are in order to reach your goals. For example, understanding the relationship between gross profit and stock holding – ensuring you are stocking the correct mix of inventory to sufficiently cover your overheads and maximise turnover and profit.
On a final note – as a business owner, it’s important to remember that you won’t achieve goals individually, they are achieved through teamwork. Relationships are critical to success, so it is essential that you invest in them. This includes relationships with bankers, suppliers and other business partners you may have. Businesses, especially newly established ones, will need to endure some tough times during their journey of growth, and it’s the relationships you have with your various stakeholders that often get you through them. The tough times are when you rely most heavily on your networks, your previous good business practice, and reputation.
If you want any more tips, tricks, advice or just want to speak with an expert, you can find Perks at 180 Greenhill Road, Parkside or visit www.perks.com.au.
You could also be one of the three lucky winners of this type of advice through the Perks Business Boost Awards, which are currently open. Entries close on 27th August, so don’t miss an opportunity to win a share of $40,000 worth of vital business services and cash to give your new business the best chance at success and growth. Get on board here: https://awards.perks.com.au/.