Starting Out: Business Finance in your First Year
Starting a business in today’s economically turbulent climate is not easy. Start-up capital is difficult to find and hard to raise but those with an entrepreneurial fire-in-their-belly will see this merely as an obstacle to surmount rather than a road block. The convenient accessibility of the internet enables those with the technical know-how to establish an online or ‘e-commerce’ business. Whether your start-up is based in cyberspace or you have a physical, bricks and mortar storefront from which you sell your wares – the principles of successful business apply. Resources must be well applied and managed which means careful consideration of time and money spent. Every penny counts, especially in the first couple of years that a business is in operation. This is why one needs to stay on top of payroll, understand how to efficaciously market the business brand, and keep track of every expense and bill. A high proportion of businesses fail in their first year as a result of poor management, lack of planning and insufficient capital. The following are some tips for how to take one’s start-up business and ensure that it lasts for a long time.
First and foremost, it is important to invest in a means of monitoring business income and expenses. Bookkeeping systems working well will account for every incoming penny, monitoring its movement through the business and helping you to prevent hemorrhaging of the company’s lifeblood. Seeing exactly how and where money is spent and where, if possible, fiscal outgoings can be shaved is of great importance: it can make all the difference when it comes to a start-up’s survival. Investing in accounting or payroll software can be hugely beneficial to a small business operation. In-house payroll and bookkeeping systems are a less costly alternative to outsourcing and may have practical advantages for a company in its infancy – which may not necessarily have the skills base or time to employ a process of traditional accountancy. Online or software based payroll can limit or eliminate paper used for records and pay checks and provide a comprehensive overview of hours worked by staff. Through this hub you can manage everything from taxes to salary and pay ensuring compliancy with current laws and regulations along the way. This saves an employer a lot of time, and reduces the likelihood of costly mistakes. Similarly, investing effort into the formulation of spreadsheets that help people track expenses and trends with graphs and other visuals is equally smart.
For a start-up business especially, assessing how money is spent and where is as important as counting up the money you make. Simple and common-sense changes can make all the difference in terms of a company’s monthly expenditure and have an accumulative beneficial effect. For example, buying office supplies in bulk will end up saving a firm a lot of money. Additionally, looking for discount office furniture and adopting frugal ways to run an office in general will pay dividends. Often, one of the biggest expenses is a simple one: energy. This is why it is important to set the thermostat at a low temperature and to be smart about when windows are opened and when they are closed. The majority of companies today are even going as far as investing in energy saving or efficient electrical equipment.
Marketing can be hugely expensive but nonetheless absolutely necessary in getting your business message ‘out there’. Clever marketing strategy is much more than having the financial ability to spend thousands on advertisements. It is even more vital as a newly established business to use all resources you have to target and engage with the market and customers. The Internet makes the world go round. This is why it is important to take advertising to the web as opposed to exclusively marketing goods and services in local publications and mailings. Using social networks, blogs, and developing your business brand through a well-made website is a cost-effective and efficient way to get the word out. More than being good practice – this is absolutely necessary. Finance is all about creativity. The more creative a group is about luring in potential customers, the more money will be saved. For example, why spend thousands on a billboard or even a radio commercial when one could simply hand out promotional items and hand out fun stickers? This will cost far less -- as much as 2/3rds less -- and is something that people will remember.
A start-up business can thrive provided that every item of expenditure is considered and marketing methods are conceived and executed in a sustainable and effective way. The quality and extent of strategic planning in this apprehensive first year of business will determine its future. Taking the time to monitor bills, setting up a professional storefront, and training staff are important investments. Tracking finances and staying organised will go a long way to ensure the longevity of your fledgling company.
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