Providing small businesses and start-ups with the financial & accounting guidance they need to be successful.
Getting a business off the ground is far from a simple proposition, as this will undoubtedly require an extensive amount of market research, startup costs, financial controls, and a handful of logistical challenges that will need to be overcome in order to go from idea to implementation. Facing this on your own can be a daunting prospect, something that can overwhelm any entrepreneur and business owner especially if it’s your first time getting a project off the ground. It’s important to have realistic expectations of what types of challenges you will face during the course of your commercialization plan. Here are some of the most common obstacles and hurdles you will need to overcome in order to make your business a success:
Depending on the type of product or service you are aiming to offer, you will inevitably require additional help to make your business run effectively. This means finding the right talent for the job, a process that can take plenty of time and resources to achieve. This is why many companies decide to outsource this task to a third-party contractor, as it can be difficult to know where to begin when searching for talent and carrying the full burden of employees and benefits is quite costly.
It’s not just a matter of locating the right talent either, as you will also need to factor in the costs of conducting such a search (running background checks, paying an HR firm, etc.) and ongoing payroll expenses. Before you begin the search of locating your future co-workers, you will need to determine what your hiring range is and whether you are able to afford hiring full time employees. You may need to eat some of the cost upfront, but if the long-term potential of increasing profits and efficiency is attractive, this is something you will want to consider.
Starting a business requires a serious allocation of time resources, something that is limited for everyone. Inevitably, you will have other job and family obligations to factor in, something that can make the process of launching your company a real challenge. As a startup business, you may also lack the financial knowledge needed to run a company successfully, as there are many considerations to take into account. It is critical to ask for help from trusted professionals when you are unsure of a particular financial issue facing your business. Having clean and precise accounting records is imperative and will make life so much easier now and in the future.
It is also important to be mindful of your company’s operating and overhead expenses, as these can spiral out of control quickly. Overhead costs vary greatly based on the type of business you are operating. For example, a firm that conducts its business online will have more costs associated with maintaining a website, server, and marketing its services, whereas a restaurant will have to prioritize costs such as rent, utilities, supplies, and labor. You will need to have a solid handle on what your overhead costs (fixed, or variable) will be in order to effectively operate a profitable business.
Many firms struggle out of the gate with significant cashflow problems, as there are many financial challenges associated with launching a business. Cash is indeed king! You may overestimate the timeframe to making a profit and underestimate cash needs, something that can dramatically hamper your initial timeline and progress. While it is important to be positive in your outlook, it is perhaps more important to be realistic and take all possible outcomes into account when planning your company’s future.
Another aspect of cash flow management to be mindful of is not having a system for tracking your incoming/outgoing cash, something which will not only make cash management a difficult task, but can lead to you hemorrhaging more funds than you should. Of course, your business will require relevant operating costs, but you shouldn’t allow this reality to empower your desire to spend needlessly on things that are more of a luxury than a necessity. When formulating your business, prioritize spending on the absolute essentials and then work from there.
Unless you’ve inherited a large sum of money, have sold successful businesses in the past, are extremely well-connected, or have the necessary credit and savings to fund your company, you will likely be facing a capital scarcity at some point. Having access to the amount and type of capital your business will need is an essential part of the start-up process, making trusted financial allies a vital component to have on your side.
Once you’ve launched your business and you have reached a point where you need to substantially grow your company, you will likely require additional capital to achieve this act, something referred to as growth capital. This issue is something every start-up company will have to face, as it means their business its a success and requires additional funding. When this time comes, you will need to have a path to make this a reality, something BPR Methods will be able to assist you with. Raising capital is a daunting task and we can make it painless.