When you’re just starting out in business there is a lot to think about. However, financial planning and management can be the difference between getting your business off to a good start and not. It’s the platform on which you can make informed and sensible business decisions – helping to ensure your business’s survival long in to the future.
So here are the Pandle top tips for effective and valuable financial planning.
Know Thy Market
So you’ve got a great idea. You’ve even got an ounce of business savvy. But have you really considered your marketplace? Carrying out market research isn’t an exercise in ticking boxes, it’s sound business practice which will provide you with valuable insight which enables you to formulate your financial plan.
If nothing else it means you have the data for making decisions on pricing and a good idea what your operational costs are likely to come in at. Market research should always be your starting block.
Handle the Cashflow
This is a tricky one for new and young businesses. Run out of money and you’re dead in the water. Frustrating when you know it’s ‘just’ a cashflow problem. You need to get your eyes on the ball and make sure you can track and trace every penny coming in and out of your business. Then build in a buffer zone.
Get a Grip on Tax
It might be boring, but one of your first considerations when establishing a new business is your tax obligations. Ignore this at your peril because it will only lead to nasty bills and frightful surprises. You need to carefully plan and understand your obligations for corporation tax, employer’s National Insurance payments, and VAT.
Set Some Financial Goals
Your mind may be running to straight-forward business goals: turnover, new product lines etc. However, the most successful companies also set themselves clear financial goals. This way you are constantly improving and moving forward, securing the foundations of your business. It also helps you to see where changes need to be made.
Be Technology Savvy
If you’re entering business today you cannot afford to take a lackadaisical approach to technology – whatever your business. Technology can and should create savings and represent a valuable return on investment. Therefore, if you’re starting up in retail you need to get your head around Electronic Points of Sale (EPOS) or if you’re further up the supply chain you may need to get an inventory management system on board. Research, research, research.
Find out what you need and then embrace it.
It’s not easy when you’re taking your first steps in business formation, but it is exciting. Put in the effort with your financial planning and you’ll see your new business take off and go from strength to strength.