New Zealand has been rated one of the easiest countries in the world to start up a business. As a country of ‘go-getters’, while this is something to be proud of, sometimes the easiest things to do end in failure because of failing in the small things. One of the areas that many start up business owners fail to execute properly is their financials. Here are five things for you to get in place from the beginning.
Many business start ups have an in depth area in their business plan that focusses on what they are going to sell and who they are going to sell it to. The businesses that manage to get past the teething problems of being in a new business figure out how to make their plan SMART (Specific, Measurable, Attainable, Relevant and Timely), with measurables driving their financials. Put aside some time to do this. With your SMART goals driving the revenue numbers in your business plan they’ll help make these goals more achievable. It is worth while applying this methodology to all revenue streams you plan to develop.
Now that you’ve got your plan, figure out who you’re going to share it with. Surround yourself with people who can help you with the parts that you don’t know, or understand. If you’re not sure what you’re overlooking, enlist an advisor, like an accountant, that you trust and can relate to. This person will be there for better or worse, so you need to be able to have a good relationship with them, and be relaxed enough to ask the silly questions (there are no silly questions!).
If you’re not the best at sitting down and doing your accounts, figure this out early and pass this on to a bookkeeper. Likewise if you’re not the best at branding, find a branding expert to help you out. Enlisting expert help will not only save your precious time, you’ll also learn from seeing them do what they do best. Expert help frees you up to work towards those SMART goals.
The first thing you should do is register with the IRD. They will expect you to know whether you need to register for GST or not (ask your expert). Once you have registered with the IRD you are ready to go. Set up a financial system of record. IRD expects you to maintain all income and expense records for 7 years – a fantastic financial system of record will help you do this. Xero is great at turning the mundane into automated tasks and is a very user friendly way to keep on top of your financial records that you are required to keep. Collaboration with your accountant and bookkeeper is facilitated by Xero, which means help is just a phone call away.
Figure out the ways in which you’ll get paid, and when you’ll get paid. Things like taking deposits, and having a seven or 14 day payment schedule for customers can be vital to a start up businesses cash lifeline.
Just as we give up on our new years resolutions, we can very quickly get busy running the business as we tend to our clients’ needs and forget about keeping our records, goals and systems up to date. Book yourself in on a regular basis to keep in touch with the people you’ve enlisted to help. Don’t just begin as you mean to go on, go on as you mean to go on. By doing small things often, you’ll find you’ll be running a more efficient and effective business right from the start.