It’s true, there seems to be this perception now that us Accountants are an unnecessary cost for a lot of start-ups. In fact, a lot of entrepreneurs I meet, whose businesses are at that early part of the cycle, often view us as a little superfluous, and a bit expensive.
I have had feedback “Maybe when my company grows and proves successful, then I will definitely contact Raffingers again”. I sense that when businesses first start out they feel too small to justify paying an accountant, particularly when our sector is saturated with online alternatives offering a full service at £19.50 per month!
Starting up a business is one of the toughest decisions and undertaking anyone can make, but can potentially prove to be one of the best, and most rewarding.
Statistics unfortunately support a fact that 20% of new businesses formed in the UK will fail in the first year alone, rising to nearer 50% within the following 5-year cycle.
Clearly there are many reasons a business will fail, but many of the risks could be reduced, or even avoided altogether, if a new venture is approached in the right way, and with the correct support and professional advisors behind you from the start.
A new business owner should always consider from the outset some key areas, but unfortunately not all will: –
- A well thought out business plan. See my separate Blog on this subject.
- Detailed knowledge of your market and competition
- Strength of business management skills and support lines
- Business structuring and other legalities
- Full application of social media and online marketing
- Understanding the true cost of bureaucracy and regulation
- Cash flow forecasts and financial management
Running a business can be a lonely existence and a struggle at times, therefore having someone who is not directly involved in the day-to-day tasks, but who can be objective, able to discuss technical issues clearly and can assist in identifying the real drivers to your business, is an invaluable resource at any stage to have.
A few things to consider: –
- You are running a business now, you’re going to be very busy.
When you start out, it’s very likely you’ll be your only employee. That means you will already be wearing far too many hats. Keeping your records and finances up-to-date is critical, and if you start to let that slip, it could be very damaging.
- Taxes are a pain, and need to be managed.
This is likely to be the biggest concern for anyone starting out. The reality is that taxes are not simple, and having proper advice and guidance at the start, cannot be overstated enough.
- Accountants don’t just file returns.
We aren’t here for the sole purpose of filing your accounts and returns, which is something that a lot of people I talk to still perceive to be the case. The game has changed!
As reputable accountants, we have dealt with many many clients in your exact situation. We will get to know exactly what your “pains” are, and can help you navigate the rules, regulations, and compliance requirements.
We can provide a full advisory service to give real insights into your business.
- Banks and Investors like accountants.
It’s true. Entrepreneurs know how to pitch an idea, but Investors want to see figures, growth projections, and hard numbers. Even if you are years away from bringing investment capital in, having an accountant at the start of your journey means having someone who knows, and has watched your business grow from the very beginning.
- Accountants can aid growth.
How do you know when it’s a good time to expand? How far can you stretch your working capital without putting your core business at risk?
A lot of entrepreneurs like to go with their gut feeling when making these sorts of decisions, and business acumen is of course a large part of successfully running any company.
We can support, by providing an advisory role at these key stages of the cycle. We can assist by examining alongside you, key changes in your business data, by designing financial, non-financial and KPI reports. We can build in control thresholds, to trigger notifications, giving you time to consider alternative courses of action etc.
No matter how strong a concept you think you have, coming across hurdles that your experience just doesn’t allow you to deal with, and not fully considering any of the key core areas mentioned above, could cost you your business before it has even had a chance.
Therefore, we will provide this crucial support line to help strengthen both your business and your own skill set, and prove to be invaluable in getting your new business off the ground, with strong foundations to give it every chance to accomplish and fulfill its potential to succeed in the long term.
An accountant should be more than a form filler, it needs to be someone who will actively seek to take an interest in your business, to listen, understand and provide an objective view and opinion.
Therefore, if you do require any advice, whether just looking to start-up or are a current business owner, please contact Raffingers.
Roy Butcher is a Partner at Raffingers LLP.
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