Ten things you need to know before starting a business

22 May 2017

1. Be clear on your idea

If you want to start a business, be clear on your idea, direction, vision and goals. Ask yourself what you want to achieve in 12 months, two years and five years. It’s alright for plans to change as your business grows – it’s having a plan that matters.

2. Invest in planning

Do your research and be confident in what you’re doing. Speak to your accountant, solicitor, business adviser and bank before you commit to anything. Small upfront costs could save you thousands down the track.

3. Timing is everything

Research the market and ensure you get the timing right. New business owners are often impatient to get started, but a poorly timed entry into the market can be extremely detrimental.

4. Get your costings right

Ensure the selling price for your goods or services factors in the costs of your overheads. Don’t be afraid to charge for your own time and expertise.

5. Be clear on your financial position

A separate bank account solely for the business will help you keep track of your expenses and help you see how much money you have at any given time so you don’t overcommit yourself financially.

6. Monitor your cash flow

Ensure you have enough cash to stay on top of both your creditor payments and your loan repayments. Make sure your customers are paying your invoices on time.

7. Prepare a budget

And monitor it carefully. Question any variance (it’s usually a sign that something needs to change) and don’t place too much reliance on credit, either via unpaid creditors or too much debt.

8. Measure performance as you go

Tweak what needs to be tweaked, but don’t leave it too long. Learn how to read your financial reports; and don’t just look at them once a year.

9. Don’t be afraid to cut your losses.

If things aren’t tracking well, don’t dig yourself in deeper. Speak to your advisers about your options. If things don’t improve, you might need to put everything on hold until the timing is better.

10. Do what feels right to you

Ultimately the business is yours and you shouldn’t do anything you’re not comfortable with. You’ll receive a lot of well-meaning advice. Never be afraid to voice your concerns and ask questions.

If you are looking for support in getting your new business up and running, reach out to a BDODrive adviser to see how they can get you on the right path from the very beginning.