You’re just starting out on your business journey. You don’t have any intentions to sell it – certainly not now, and maybe not ever. So why should you set up your business as though you’re preparing it for sale?
Simply put, having a future-focused and diligent mentality from the jump will get your business started down the right path and keep you moving forward. When you run your business with the mindset of an investor and treat it as an asset to be sold, you’ll naturally prioritize fundamentals like bookkeeping, review processes, and attention to detail.
Plan for the future to thrive in the present
When you’re just setting up a business, you’re dealing with a long checklist of tasks to tackle. It can feel overwhelming, handling everything from structuring and registering your business with the government, setting up your online presence, conducting market research, and so much more.
With such a long to-do list, you may be tempted to cut some corners. You might think to yourself, “I’ll deal with this later,” or “I’m so small just now. None of this will have a big effect.”
There are two reasons why we advise against this sort of mindset.
The first one boils down to this: if you’re not planning for your big dreams, you’re not going to reach them. Running a thriving, successful business means big-picture and long-term thinking. The work you put in now, at the very beginning, will pay off and reap results time and time again in the future.
The second: a mindset of cutting corners in the beginning could get you in trouble is when it does come time to either sell or grow your business. At some point in the future someone is going to come in and pick through all your dirty laundry, and it’s important to take steps in the present to minimize potential fall-out.
For example, putting off acquiring the appropriate permits or insurance might seem like no big deal in the present, and might even seem like an easy way to save time and money. HMRC have bigger fish to fry than you! But what about when you become one of those big fish? If you’re aware that there will come a time when someone’s looking through all your closets, it’s easier to make sure they’ll find no skeletons in them.
Prioritize bookkeeping from the jump
Diligent and detailed bookkeeping is the best way to ensure your business runs smoothly, from day one on into the future. Bookkeeping is the daily recordings of all your business’ financial transactions. That’s right: daily! You’ll be tracking how much, and in what form, money is flowing in and out of the business, including:
- Expenses – the money your business is spending, on things like utilities or salaries
- Revenue – the money your business is bringing in through sales
- Assets – resources owned by the business that have a measurable future value, i.e. cash, vehicles, long or short-term investments, equipment, etc.
- Liabilities – the money or debts owed by the business, like accounts payable or loans
- Equity – the value of the company, assets minus liabilities
All this information can then be compiled into financial reports that will help guide you in your business, from hiring to loan applications to profit margins and more. This is the big picture, long-term thinking we discussed earlier.
Having a complete and accurate picture of your business’ finances will allow you to make the very best decisions possible for the present and the future.
While there are some excellent accountancy software like Xero to help you, bookkeeping can be complex and frustrating. Without the proper experience, you’ll also struggle to identify and fix the mistakes in your own accounts. Retroactively addressing mistakes in your bookkeeping can cost a fortune, and suck up a lot of your valuable time, which is why we often recommend hiring a trusted bookkeeper or an accountant in the early stages of your business.
Embrace therapy for your business
You never expect to be an expert in something the first time you try it. Setting up and running a business is no different! We wish we could promise you that with a business plan or airtight bookkeeping everything will run smoothly, but mistakes do happen.
Therapy for your business means consistent check-ins on how things are going, where you’re not only honest with yourself but reaching out to trusted sources for frank feedback. When mistakes do happen – and they will, though you can minimize the severity of them – it’s important to understand why, how you can fix things, and what you can do to prevent them from happening again.
Look at your business as a group effort
If you have partners or other managers in your business, you might consider holding monthly review meetings. A review meeting is where you overview your current progress as a business and compare that to your ideal or projected performance outlined in your business plan. You’ll go over:
- Financial statements
- Major milestones, ones you’ve hit and ones you haven’t reached out
- Current strategies and how they might need to be adjusted to reach future goals
- Any other concerns, or visions, for the business
Group discussions such as this keep everyone on the same page and actively engaged in the future of the business
You can also build a support network for yourself outside of the business with experts like a legal advisor or an accountant. These people will not only keep you accountable, but can provide invaluable advice and guidance. For example, an accountant who digs deep into your business – like we do at Raedan – and understands your goals and priorities can assist you with pricing queries, hiring, loan and funding applications, and so much more.
If you’re ready to set your eyes on the sky and take your new business to its greatest heights, get started here and tell us a bit more about yourself.