Getting Your New Business Off to a Good Start: Six Key Financial Considerations

Starting a new business is incredibly exciting on all fronts, and now that you’ve set up shop, acquired the necessary funding, and have some initial marketing in place, you’re likely raring to go. 

Before you start properly, though, have you taken care to ensure all your finances are in order? It’s likely that you think you have, but even when you reckon you’ve gone through everything, there may well be some aspects you’ve missed. 

1. Finalizing Your Financial Projections

Even if you think you already have a good handle on your financial projections, it’s important to scrutinize them again before you open your doors. Double-check that your forecasts are as accurate as possible, and have your business partner or another trusted advisor look over things to confirm. 

Revenue forecasts are particularly important, as you need to know how much you’re expecting to earn in order to properly gauge your success – these forecasts should be segmented into your first month, quarter, and year. 

2. Opening a Business Bank Account

Opening a business bank account is a common aspect of business that many neglect to consider – but you’d be doing yourself a disservice if you miss this step. 

It’s crucial to keep your business finances separate from your personal accounts, as if not, it’ll be a nightmare trying to deduce cash flow and manage your taxes. Having a business account is also an important part of appearing professional to your prospective clients, and it’s necessary to build business credit, which you’ll need if you’d like to apply for a loan at any point. 

3. Pricing Your Products or Services Appropriately

You’ve likely put plenty of time and effort into pricing your products and/or services, but how long ago did you do this? With so many different aspects to manage as you set up the business, it’s possible that by the time you’re ready to go, the market will be slightly different. 

Before you make your first sale, have a quick look over your pricing again. Review the data you’ve gathered on your target market and ensure you’re giving them the best deal possible while also achieving maximum earning potential.

You should also take a look to see if there are any new competitors in town since you last reviewed your pricing and make a note of what they’re up to!

4. Hiring an Accountant

The importance of hiring an accountant cannot be understated. Even when it comes to running the smallest of businesses, the numbers can quickly get out of hand and result in a confusing mess if you don’t really know what you’re doing. 

For a small fee, certified public accountants can completely remove the stress from this portion of day-to-day operations. If you haven’t secured one yet, it’s not too late – don’t wait until later on down the line.

5. Always Keeping a Watchful Eye on Your Cashflow

Many people fail to realize the attention to detail required when it comes to running a business, and one of the most important aspects to keep an eye on is your cash flow. It’s easy to get caught out without enough money to cover your daily expenses, so as you work through your first month, make sure that customers are paying you on time, that your bills are all accounted for, and that you’ve adjusted for any fluctuations and seasonal changes in your projections. 

6. Understanding Your Tax Obligations

While your accountant will be able to help you with your taxes, don’t make the mistake of being ignorant of the process and what you owe. 

It’s important to be aware, for example, of how your business structure affects the taxes you pay (whether you’re a sole proprietor, LLC, or corporation), as well as your sales tax requirements (this can vary depending on the area you live in). 

The more details you know about your finances, the better, and one of the most fundamental areas to be clear on as a beginner is your tax obligations. 

Wrapping Up

This article has provided you with six key areas of business finance you should carefully consider, but that isn’t all there is to know. Use the above points as a platform to do further research and ensure everything’s crystal clear before your operations begin. You’ll still make mistakes, of course, but the more you know early on, the better you can mitigate their impact.

This is a contributed post.