Three years ago? Why three years? Well, according to those who have done their research, this is the average time it takes for a new business to start returning a profit.
If that is the case, it’s a good time to take a (very quick) breather and evaluate what return you’re seeing on all that slog. Reflection on your financial management strategy is valuable to ensuring the company stays on track, and that you’re not digging yourself into a hole.
So, to keep you out of trouble, we rounded up our favourite tips from established businesses who had to learn the hard way.
Don’t get behind on your bookkeeping. Ever.
Bookkeeping can be a chore, we get it. Churning through receipts can be heavy going, and admin takes up valuable time. But, doing it as you go makes life much easier, and future-you will be hugely grateful.
Save procrastination for not washing the dishes straight away, rather than getting behind on your books. It reduces the risk of errors, helps you keep an eye on your financial health, and means you’re less likely to get a grilling from HMRC.
Get yourself a good accountant
With so many other things on your mind during startup, it can be easy to lose sight of the basics. A solidly experienced accountant who works in an innovative way will help you succeed, meet deadlines, and operate efficiently.
Don’t employ staff you can’t really afford
When you’re super busy and trying to spin too many plates at once, it can be tempting to recruit someone to delegate to. Be aware though, employees come with legal contracts you are obliged to fulfil so don’t commit to something you can only really afford in the very short-term. Try recruiting the help of freelancers on a gig-by-gig basis instead.
Separate work from play
Doing so will protect your health by giving you some space, and removes the temptation of using one set of finances to shore up the other.
Pay bills on time, every single time.
Don’t get yourself into debt if you can afford not to. And, if it looks like things are snowballing beyond what you can manage, jam on the brakes before the problem gets worse. This can also include being careful about contracts you commit to with suppliers.
Are there tips we’ve missed, or things you would like more advice on? Let us know!