If you are running a startup company then a key requirement will be keeping your finances healthy. This might sound obvious, but you would be surprised how many companies end up with debt and hope beyond hope that they will be able to pay it back once they find success on the market. This hardly ever works and debt isn’t even the only financial issue that you could face running your company.
The good news is that for every financial issue that you might encounter with your startup, there is also a solution. You just need to make sure that you are being smart about how you run your company and that you do work to avoid any issues.
So, let’s explore some of the key issues startups can face with their finances and the right ways to tackle them head-on.
Since we already mentioned this problem, it seems prudent to start with the issue of debt in your business model. It’s true to say that some businesses do start in debt from day one and even build it into the business plan. However, if you’re going to do this then you need to have a game plan and make sure that you follow it through. In other words, you need to make sure that you know when you need to pay the money back that you owe. Or, if you’re thinking about selling your business to make the money you lost back, it’s important to ensure that it’s attractive to buyers.
If you are struggling with the debt that your business is in, there are always options. One possibility would be to think about using a debt consolidation loan. This could be beneficial if you do owe money to lots of different creditors in your business model. If you are taking out a consolidation loan, then you should think about using a service like Plenti. They’ll provide you great offers on a loan like this which will be beneficial to you. The key point here is that the interest rate is lower than what you’re paying right now.
A big issue that is often completely overlooked by new business owners is tax. If you run a company, you need to make sure that you are thinking about taxes as soon as you open the doors. This means that you do have to get your books in order. You should have an accurate record of your incomings and outgoings for your business. You will also need to make sure that you are paying the right amount with your taxes. This can be quite tricky, but it’s certainly not impossible.
If you are struggling to keep track of your taxes, then you can think about hiring a trained accountant. You can outsource a solution like this to get the support that you need for a fraction of the price.
Alternatively, you might want to think about using a cloud outsourcing solution. With cloud software, you’ll be able to make sure that you can keep track of your accounts in real-time. This will match the budget of countless businesses on the market and is completely scalable.
While taxation time for your business can be expensive, it’s important to note that there are lots of legal ways to cut the costs down to size. You should consider speaking to an accountant about this possibility.
It’s also possible that the big problem in your business model is that you are overspending and this could ultimately lead to your company slipping into the red. There are various ways to cut high costs in your business model down to size. For instance, you might want to think about starting by setting a business budget. This will make it easier to stick to a limit on spending in your business model.
Next, you should think about making your business model more flexible. The main aim here is to make sure that you do eliminate costs that are eating away at your company. For instance, you could be running your business from an office, but is it worth doing this? The reality is that you would probably be better off running your business from home if this is going to work in your company model. Most businesses these days can be run from home without any issues or concerns at all.
If you explore your business model, you’ll probably find that there are lots of different places where you can cut costs and ensure that they remain at the right level. For instance, you could find that you are overspending on a company supply contract. You should definitely think about researching the market and potentially exploring a cheaper deal for the same quality service.
It is possible that the major financial issue in your business is related to legal trouble. You might assume that it’s easy to stay on the right side of the law when you’re running a company. However, the reality is that it can be a lot more challenging than most business owners realize. If you are struggling to keep on the right side of the law, then you should think about hiring a legal advisor. This is another service where you can and potentially should use an outsourcing solution. That way you can keep the price low and have a rep on the phone whenever you need them.
Be aware that there are various aspects of your business that could put you at risk of an expensive legal issue. One example would be data protection. The laws and regulations on data protection are constantly changing. If you don’t keep track then you will eventually be hit with a massive fee here, particularly with regards to the GDPR.
Another major area of your business that can lead to legal trouble is your business team. It’s possible that you are hit with a legal claim because an employee was injured on your property. With premises liability, if anything goes wrong on your property, then you could be held accountable as well as liable.
One of the ways that you can fix this is by ensuring that you do think about hiring a health and safety officer. They will check for any hazards that could leave your company vulnerable.
Finally, you might find that the big financial problems that you’re facing in your business model is a low number of sales. It can be quite difficult to hit the ground running with a new company. There’s definitely a reason why 90% of new businesses online fail within the first year. However, it’s also worth noting that there are always ways that you can correct a low number of sales. For instance, you can think about investing in an updated and improved marketing campaign.
Part of the reason why businesses have low sale numbers is that they don’t spend enough on marketing from day one. According to experts, businesses should be aiming to spend about 20% of their total budget on marketing. In doing so, they can guarantee that they are able to make a killer impression with an eager audience.
We hope this helps you understand some of the key financial issues that you can have with your startup and the steps that you need to take to ensure that these don’t become a massive disaster. If you make the key decisions here you will be able to make sure that the longevity of your business is effectively preserved for the foreseeable future.