Key areas to focus on when starting a business

Key areas to focus on when starting a business

Having your first great business idea can be a turning point in any entrepreneur’s journey. But getting your idea off the ground and monetising it can often be a challenge. There are no hard and fast rules for starting up a business, but there are some general principles that will help you to drive success and create a profitable enterprise.

Hassan Behcet explains why stepping back and creating a watertight plan is so important, and why working with an experienced adviser from the start is so critical to your success.

Partnering with an adviser from the outset

Starting up a business requires a lot of thinking and forward-planning. The most important thing to do is to get a good adviser on board from the outset.

Entrepreneurial people who come up with a good business idea tend to dive in head first. They have the idea and don’t always think about a plan, or map things out. This usually means that they don’t engage an adviser until they’re quite far ahead in the startup journey.

Hiring an adviser may seem like a big cost but, in fact, you save money by not making the fundamental mistakes.

Finding your adviser means doing your research via the right channels. It may be that your adviser comes from a recommendation from someone in your network. Or it may come from a Google search of accounting firms in your local area. However, word of mouth is definitely important and talking to fellow founders can be a great starting point.

The value of objective, independent advice

Hiring an adviser isn't just about having an accounting expert on your team. It’s also about having someone there to help you take a step back from the day-to-day operations and look at your business from the outside.

Having this objective and independent viewpoint can be revealing. Often, founders can find it difficult to see past their business idea and to honestly analyse the strategic and operational side of the business. A good adviser helps you do this, right from the early days of the startup.

Key areas to focus on when starting out

With an adviser on the team, you have the benefit of their commercial knowledge, expertise and business network. But you can’t rely solely on this advice to get your idea off the ground – there are other foundational elements to get right.

At the early stages of the business, you should:

• Do your research – it’s so important to research your market, your customers and the more general startup principles. Read some good books on startups from other entrepreneurs, or listen to business podcasts, and get to understand what others have done, what they did wrong and what they did right.

• Find a good accounting platform – Xero is a great online accounting app and lots of startups find it easy to use and a good, cost-effective option. You don’t need lots of accounting knowledge to use it, which is a real bonus if you’re a new entrepreneur with a limited understanding of accounting. It’s vital to record and track all the financial transactions, and Xero is a really good intro to this bookkeeping process.

• Understand what apps you need – research what apps you might need to run the business effectively and how these could create an effective business system. This might include a good project management tool, a client relationship management (CRM) system, inventory systems, or tools for automating elements of your startup’s admin and data entry.

• Open a business bank account – you should use a business bank account, not a personal account, for your financial transactions. Keep your business and personal money separate and your accounting and personal wealth management will be far easier to carry out.

• Be organised and go digital – keeping your bookkeeping and financial management organised is essential. If you have no records and come to your accountant with a box of receipts at year-end, this isn’t a productive or efficient way to manage your numbers. It’s much better to have everything organised and under your control. Having all your finances in a digital format, also helps you stay compliant with the Government’s Making Tax Digital legislation – giving you a straightforward way to submit digital returns for your VAT and business taxes.

• Make good use of business intelligence and management accounting – once you have the correct adviser and a good accounting set up, there are hundreds of apps to help you track, monitor and analyse your important financial and non-financial metrics. The more oversight you have of your key numbers, the better your decision-making will be and the more successful you’ll be as a startup.

This isn’t a totally comprehensive list. You also need to think about getting investment into the company, building a brand and marketing so the world knows you’re there.

If you can get these basics right, you set the foundations for running an organised and streamlined business.

Having the right people to support you

We talked about core values in business in a previous blog post, and how you need people who share those values and can take you to the next level of your business journey. Having the right team behind you as a founder is essential.

Everyone’s definition of success at this stage is different. But as a general rule, you know you’re at the next stage when the key operational processes become unmanageable on your own. This is the point at which more hands are needed on deck, whether that’s in-house hires, or outsourced freelancers and specialists.

There’s always been a mood towards outsourcing these things when you’re a startup. It’s usually cheaper to outsource than taking on an employee. You might only need marketing for two days per week, so why bring someone in-house full time? Sometimes you find that the outsourced specialism does need to come in-house, if it becomes too much to handle via outsourcing.

This is where an objective adviser is so important – helping you to visualise the issue and plan out all these disparate operational elements.

The value of working closely with your adviser

If you’re too involved in the operation details, you can’t see the wood for the trees. An adviser can come in and be objective. Many early-stage founders believe that they can do it all, so accepting that you need help can be a big step.

Entrepreneurs have a certain mindset and are generally risk takers. They have a certain drive and they are not scared to jump in feet first. However, to be successful, you want there to be calculated risk, where your decisions are based on some kind of evidence.

At Haines Watts North London, we work closely with our owner-manager clients to make sure you always have an independent opinion on your big business decisions, with the metrics and numbers to back up your next step. In a nutshell, what you need is the right advice at the right time. Because we work with so many owner managers at Haines Watts, we’re able to draw on that pool of shared experience and that really adds value for you and your startup.

To make your startup business work, get the right adviser in to support you, with the right insights, experience and advice, at the times you need it most.

Get in touch with us and let’s build the foundations for your startup success.