Assuming knowledge when you’re starting out in the world of business can often mean missed details and crucial points overlooked. Starting a business from scratch forces you to wade through one of the most important aspects of your operation: your numbers.
If you own a small business, you need to come to terms with the mysterious realm of accounting, a world which is forbidding and intimidating for those who’s skills lie elsewhere.
Cashflow, balance sheets, suppliers, pricing, budgets, accountants, cloud accounting, GST, as well as debits and credits; they are a complex string of systems and it’s important to cut a clear path through the jungle.
Mapping out this pathway can be simplified when starting from scratch. Replace your fear of accounting with tools to drive confidence in the business world.
Become the master of numbers
Here are some tips on mastering your small business journey into numbers.
1. Get in touch with a qualified accountant / bookkeeper
Find someone who specialises in small businesses
Assess if they’re flexible and free to run ideas or thoughts by. Talk frequently.
Ensure the experience and qualifications of your chosen financial professional are also matched by their ability to deal with your software provider and chosen products.
2. Always keep on top of your budget
Visibility into your finances is core to the viability of your new business.
Know where your dollars are going and when they are hitting the bank account.
3. Due dates are important to know
Ensure you are aware of important ATO dates; when is the business activity statement (BAS) and Income Tax Return (ITR) due?
Plan your cashflow for large expenditure.
Tip: Most banks provide an offset account for GST; this will assist with the ebbs and flows of the GST arena.
4. Finance your expansion
Banks are not the only providers of cash for growth, take a look at some of the non-traditional lenders and what they can offer you.
Smaller institutions are often more familiar with the needs of the entrepreneur or start-up which can result in better rates, smaller and more readily accessible loans.
5. Learn and absorb as much as you can about numbers
Take in as much as you can – listen, read and educate yourself.
Be informed about the current thinking around your industry and community. Resources are everywhere, take time to read them.
6. Negotiate with everyone
Yes, everyone! Pick up the phone and ask, there’s nothing to lose.
Discuss options – 12-month plans, buying in bulk with suppliers, changing terms of payment to extend your cashflow, free delivery, trade services for goods, Insurance by the month, use free skype calls for business, conduct meetings via web (zoom, GoToMeeting) to reduce travel costs.
7. Make outsourcing your friend
You are the expert in your business, but leave the rest to local specialists for Technology, Human Resources, Marketing and Design. Remember to negotiate.
8. See value in your own time
You are a valuable commodity that comes with a market rate.
You are investing hours into your business, living and breathing your passion, make sure you are compensated.
Reward yourself – become an expense and pay yourself even if it’s only a small percentage of your monthly profits (not out of revenue).
Listen and learn. Take all opportunities and listen to the experts.
Sam Allert is the Managing Director ANZ at Reckon, a leading Australian cloud accounting software provider.