For entrepreneurs and prospective business owners making their first foray into starting their own business, longsighted goals and lofty idealism can often obstruct more pressing considerations that need to be addressed and planned for during a business’s first few months. Specifically, accounting for one’s expenses is a task that while extremely vital to the security of a young company, is too often ignored as being a secondary concern for the accountant.
While the prospect of starting your own business is certainly exciting, crafting a budget that adheres to a plan for eventual growth should be a sobering and important part of the preparation process. The major predator to a startup’s early finances is expense. While some expenses are obviously necessary to create an atmosphere to conduct business and pay those who may be helping you achieve your goals, there are many expenses that should not even be on the table when you’ve just cut the ribbon.
Hold off on unneeded travel
Unless your business relies on you to be in constant movement, traveling is one of the easiest ways to drain your wallet with virtually no return on investment. On top of the fact that airfare and other travel costs can add up to be very expensive, research has shown workers to be less productive when not working from home base.
Today, the need for in-person meetings has been essentially erased by cheap or even free software tools like Skype and GoToMeeting, which allow people from all over the world to connect virtually from their own offices.
Don’t take on employees if extra help isn’t essential
While the stigma of the “large company” still seems to stand as a measure of success within business, taking on a crew too large for the ship can sink it quickly. Not only does payroll often end up destroying your bottom line when you employee too many people, but there’s also the problem of efficiency when smaller tasks end up in the hands of too many people.
Too many cooks in the kitchen can lead to miscommunication, delays, and other issues that can slow your workflow down considerably. Of course, depending on the size and specific kind of work you do, you may need to delegate business to a team of employees. Make sure when you do hire, your team is talented and ready to assume the responsibilities you’ve carefully laid out for them to accomplish.
Don’t go overboard on a website
This can become a complicated part the business depending on the industry you’re in. Of course, if you’re a software company or another digitally-oriented organization, designing your website is probably more important than designing your office.
However, for those new to web development or are looking to create a “stunning web presence,” remember that although anything is possible online, the design of your website should reflect the efficiency of your actual business. The more bells and whistles you attach to your site, the more can go wrong. Shape your web presence around practical functionality rather than provocative aesthetics.
Don’t advertise until your product or service is solidified
The first six months in the life of a startup are not set in stone. No matter how concrete and thorough your planning process was before launching, your business will no doubt encounter some ebbs and flows, which may ultimately lead you down another business path. With so much uncertainty as you test the waters, it’s wise not to make any major advertising commitments before you know exactly what your product or service will be.
Quick money versus longterm customers
While some startups are simply too large in scope to get off the ground without some degree of outside investment, most startups can get off the ground on a limited amount of initial capital. Unless you find yourself at the helm of a high-growth business needing the attention of investors, turn your attention to attracting customers. Raising money can be a full-time commitment than can pull the head of a company away from more pressing day-to-day tasks that will result in more sustained growth.
If you’re looking for financial advice regarding a new startup endeavor, our outsourced accounting and CFO services experts can help you carve a successful future for you and your business idea.