Not sure on something?
At Least 5 Very Good Reasons Why It Does!
Okay, so you’ve finally taken the plunge and decided to run with that brilliant business idea that’s been bubbling away in your head for a long time. Let’s say you’re lucky enough to have a little money you’ve set aside, your business idea doesn’t need much in the way of equipment and you don’t need a start-up loan or anything very formal in place before you can get going.
The business is just you and your genius.
That’s great (if a bit unusual), but the point is that you’re convinced you don’t need any outside agencies getting involved at this early stage; you can just get the business cards printed, book a few networking events and off you go. Well, maybe you can if you’re very lucky, but it’s not such a good idea to base a business on luck – even professional poker players have more than that going for them…
…they have a strategy, a game plan.
You need one too.
A couple of ideas jotted on the back of an envelope won’t do – you need a proper business plan.
‘But,’ you say, ‘I’m not borrowing any money, so why do I need a business plan?’
Business plans aren’t just something to give a prospective financial backer, they’re strategy guides and long-term route planners too. You wouldn’t set out on a long trip of a lifetime without a map or itinerary of some sort and starting your own business is a terrific journey, so get a good roadmap organised.
There are many places to get business plan templates – there are loads of free ones online (The Prince’s Trust has several business planning docs here and there are seven different ones listed here). Your bank probably also has one you could use. There are a lot of basic questions to answer, like:
The hardest questions to answer, however, are the ones about how much turnover and profit you anticipate making and what losses you may incur along the way. How can you predict something that hasn’t happened yet?
This is where you need to start talking to your friendly local accountants.
‘But,’ you say, ‘I won’t need an accountant until I’m ready to do my tax and that won’t be until the end of the year, right?’
Wrong. Accountants do a whole lot more than just sort out your self-assessment tax form. They can help would-be entrepreneurs go through their business ideas and get the important financial stuff down on paper in a logical way, which will make it easier to forecast what the business could look like a year or more down the line. You can get valuable assistance in writing a business plan that works.
Accountants see an awful lot of different business types passing over their desks and they build up a very good picture of what strategies work and what don’t.
Without giving away any confidential information, but based on what he or she has seen of other companies in your sector, your accountant can help to steer you in the right direction, assisting you to avoid some of the pitfalls and make use of what works for others. You can also get help to better understand the market you’re working in and the competition you may be facing and you could save yourself quite a lot of research and legwork.
There’s a lot of other important things you’ll need help with too:
and, yes of course, you’ll get your tax return done as well.
You might still think that taking on accountant fees so early in the life of the business is an expense you don’t need, but just work out how many day-to-day tasks you may be having to take charge of to get things off the ground:
and probably more. Although not all of these may apply to your business, do you really want to be worrying about your finances on top of all that?
One of the first and best things to learn in business is to delegate tasks to trusted people when possible, because it leaves you free to do the stuff that nobody else can do as well as you can. Having an accountant is like having another member of your team who is watching your financial back and can help to stop you getting into trouble. Just the peace of mind it brings can be worth gold.
Once you’re up and running in your new empire, you need to keep your accountant updated on a regular basis with what’s going on and in return you’ll get sound advice on things such as:
and much more. Your business plan isn’t a static thing – it will need tweaking and revisiting as you go along and your accountant can help with that, keeping you and your business on track.
You may even be able to get a bundle saved on your tax bill too.
Basically, the earlier you get an accountant involved in your business, the better they will get to know it and you, and the more help they can be in the years to come.
An accountant is good for the whole life of your business, right from the beginning, not just for the taxes once a year.