When you are starting a new business, there is so much to do and so much to learn and, sometimes, you don’t know what you don’t know. We’ve asked our expert team to give you their top five tips for new businesses. Some tips are from their own experience as business owners and some are from their own area of expertise.
This week, it’s Adam Fernandes’ turn, to give you his top five tips for Accounting.
Tip 1: Begin with the End in Mind
This isn’t actually mine – it comes from Stephen Covey’s Seven Habits of Highly Effective People – but it is sound advice.
Think about why you are starting your business and the legacy you want to leave behind. Do you want to hand the business on the kids, sell it when you retire, live a simple life or something else…? And when your business is successful, what will that look like. Is it a series of shops across the UK, a franchise around the world, a 50,000 square meter factory, a team of people out in the community doing good…?
By keeping that vision in your mind, you can plan ahead – and it will inspire you when times get tough.
Tip 2: Have a Budget and Forecast
Of course I’m going to include this in my top tips!
A budget is your plan of what you expect to spend in the next financial year and what you want to generate as a sales target. Make sure you set this up to take account of all the costs you are likely to incur, any start-up loans you need to repay and allow for some contingency just in case. Plan to have some money left at the end of the year (called the ‘reserve’) and don’t forget to pay yourself. Now you know what the year ahead looks like.
The forecast is what you expect to happen and how that will affect your business numbers – most importantly cash! It allows for the fact that it might take 30 (or 60 or 90) days to be paid once you have made a sale, and that you need to pay for supplies to make the goods you want to sell. The ‘cashflow forecast’ is a vital tool for a small business so get help to set one up as soon as you can.
Tip 3 – Plan your Organisation Structure in Advance
Spend a bit of time working up and organisation chart for your business when it is ‘finished’ (see tip 1) so you know who you are looking for when you come to recruit. It may be that, right now, you fill your own name in to every box on the chart, but it makes the process of recruitment so much easier if you already have that chart in your mind.
Tip 4 – Never be Afraid to Ask Questions
There is no such thing as a stupid question and there are so many things to learn when you are new to running your own business. So, ask lots of questions and get lots of opinions. If you are planning a big decision, test it out with several different people who have done something similar, to get their feedback. Be willing to consider it even if you don’t always like what you hear.
Tip 5 – Set up your ‘Default Diary’
The biggest discovery of every new business owner is that there is never enough day for everything you need to do. So, you need to protect your time and make sure the things that matter get done.
Electronic diaries are great here because you can set up repeating time blocks, but paper works too. Add to every week of your diary the following:
- Any regular meetings or training sessions that happen every week or month
- Time to do the invoicing, bills processing and bookkeeping every week
- Time to get work done in peace and quiet
- Daily email and message time – to respond to everything coming in
- Friday afternoon – as your ‘mop up’ time and to plan the week ahead.
By having these all blocked out in advance, you can’t fill your days with meetings and miss out on the essentials. Then you can have time off at the weekend and recharge without worrying about an overflowing inbox or bills that haven’t been paid and are overdue.
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