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The Accountant’s Guide To Starting A Small Business

New business start-ups have increased since lockdown, but starting your own business isn’t just a case of waking up one day and going for it. As the saying goes, fail to plan, plan to fail.

Here’s the Clarity Accountants guide to going it alone and starting a business.

Have a detailed business plan

When starting a new business, it’s important to create a detailed business plan so you can make sure your start-up business is on the right path. A business plan will help you to approach the bank for financing and set up milestones for success. Having a plan in place will also help you understand the goals and objectives of your business and how you can achieve them.

Your business plan should include information about your target market, product/service offering, pricing strategy, competitor analysis, operations plan, marketing strategy and financial projections. Creating a comprehensive business plan can be time consuming but it’s essential for the success of your start-up business.

Know your numbers

Understanding your numbers is an essential skill for any entrepreneur starting a business. Knowing your profit margins, break-even point and any hidden costs is vital to the success of a start-up business. Calculating your profit margins allows you to identify how much profit you are making compared to your total revenue. Having this information will allow you to adjust your pricing or costs so that your profits increase.

Understanding your break-even point is also key; it’s the point where all of your costs have been covered and you start to make a profit. As an entrepreneur, being aware of any hidden costs is also very important, as these can often be overlooked when budgeting for a start-up business. Keeping an eye on these aspects of your finances will help ensure that your start-up business is successful.

Understand your financing options

As an entrepreneur starting a new business, it is important to understand the different financing options available to you. Before diving in and taking out a loan or seeking out an angel investor, do your research to determine the best option for you and your start-up business.

Grant funding is one option to consider if you are eligible. Research what grants are available to you based on your location, sector, and type of business. This can be a great way to get your start-up business off the ground without taking out loans or finding investors.

If you decide to pursue angel investors, be sure to do your due diligence and choose an investor who understands your business model and aligns with your goals. When considering a loan for your start-up business, be sure to crunch the numbers and make sure that you can afford the payments. It is important to ensure that the loan will help you grow your business, not just cover costs.

Keep your personal and business finances separate

As a business owner, it is essential to keep your personal and business finances separate. Having separate accounts for personal and business expenses will make tracking your spending and income much easier. This way, when it’s time to file taxes, all you have to do is refer to your business records.

Additionally, always save receipts for all of your business purchases and expenses. This will help you stay organized and ensure you’re able to get the most out of your taxable deductions. Finally, track your spending and income to make sure you don’t get in over your head. Doing this will allow you to make the best decisions for your new venture.

Stay compliant

As a start-up business, it is important to stay organized and comply with the relevant regulations. This means knowing your legal obligations in regards to filing with HMRC and Companies House, registering for VAT and other taxes, and understanding the rules around contractors and payroll for your staff.

Failing to comply with the required rules and regulations can have serious consequences. Not only can it lead to hefty fines from the relevant authorities, but it can also result in loss of credibility and reputational damage. In extreme cases, it can even result in criminal charges.

It is therefore essential that you take the time to understand the requirements for compliance and make sure that you are following them. To ensure that you remain organised and compliant, hire a reliable accountant who can keep track of all the paperwork for you and make sure that everything is filed correctly and on time.

Hire a good accountant

If starting a business sounds intimidating, it’s important to make it a priority to hire a good accountant who can provide the help and guidance you need. An accountant will help you understand your numbers and make sure your finances are in order. This can be especially beneficial for new start-up businesses that need to keep their finances organised from day one.

Clarity Accounting specialises in working with start-up businesses as well as established ones. With our expertise, you can rest assured that your finances are taken care of. Get in touch with us today to learn more about how we can help you get your business off the ground on the right footing.

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