More and more people are deciding to go it alone and start their own business these days with half a million new micro businesses set up every year. The number of those businesses that go on to become larger businesses however is small at just 6% so the stakes are high for those startup founders with ambitions to get out of the micro enterprise stage and into fully fledged business status. Achieving this transition, however, is as much about having the right accounting skills as it is about going out and getting the sales. Here are some tips on getting your accounting right as a startup…
Build a cash reserve
Every business needs cash to survive long term so placing money in reserve for a rainy day could help save your business later on. It will also give you additional funds for growth if the business starts to take off. Some businesses fail even when they have a good product or service to offer simply because they run out of cash.
Don’t be afraid to seek finance
It is extremely tough to grow a business from a start up on the cash it alone generates. Taking on additional staff and paying for office space each month can be a significant cost and the business has to generate enough surplus cash to make this possible. There are now plenty of options out there to raise funds for your business particularly if the idea has lots of potential.
Get help with accounting
If you are setting up in business for the first time, then hiring an accountant to help with tax returns and financial planning can help remove one of the big headaches of starting a business. Figuring out tax liabilities and so on can be daunting and a good accountant will ensure the business gets off on the right footing.