As we begin to follow the nation's recovery roadmap out of lockdown, now is the time for start-ups to get ready and seize new opportunities. For your small business venture to work successfully however, it is essential that you know exactly what is involved.
According to an article in The Telegraph, 20% of new businesses will fail to make it past their first year, and a staggering 60% of new businesses will go bust or cease trading within their first three years. Taking the time to get the set up right now can make the process seem less daunting in the long run. Below are the basics of a start-up checklist:
- Evaluate opportunity with a business plan
- Formulate a marketing strategy
- Draft a budget
- Choose an accountant
- Determine your business structure; sole trader, partnership, LLP or limited company, and get set up
- Register your business
- Set up your bank account and obtain funding
- Choose accounting software for record keeping
- Obtain insurance such as public and employer liability insurance
- Start selling!
The right business structure and strategy is vital for any start-up venture, which is why it is important to be aware of the main pitfalls that many new businesses face in the early stages of their journey, so that you can work to overcome them and prepare for long-term success.
One of the key areas to focus on from the get-go is effective cash management. The importance of cash flow forecasting and management cannot be understated; it enables you to identify potential shortfalls at an early stage and to adapt your initial operations to suit. Cash is, and will remain, king. No matter what your turnover is, if your cash flow is always negative, then you do not stand a chance. Some of the main remits to get to grips with include:
- Understanding the concept of working capital
- The benefits of cash flow forecasting and how to identify gaps in cash resources
- The importance of credit control
From effective cash management and decision making with data, through to business planning and appropriate KPIs, learning more about these areas now will help you to plan and prevent the difficulties you may have otherwise faced at a later date. Hazlewoods Business Advisers and Chartered Accountants specialist Accounting Solutions team can help you navigate these tricky first steps to support you in becoming a business for tomorrow.
If you would like to find out more, sign up to the first session in our live webinar series 'Overcoming the pitfalls of start-up businesses: Effective cash management', Thursday 13 May 2021, 12.00 - 12.45pm, here.