Firm financial foundations for startups

Our last Startup Breakfast Club was all about how to ensure your startup has robust financial foundations. Here's 8 top tips for you courtesy of Richard Holstein - Campaign Marketing Manager at MYOB and Richard Abel - Managing Director of the Accounting and Taxation Centre.

✓ No matter what the reason for going into business – you’ll need to underpin it with sound financial planning and management.  You need a budget, you need to forecast, and you need to stay on top of your cash flow.

 

✓ If you don’t know basic accounting fundamentals, then you’d better learn them and fast.  There are plenty of free resources on the web that’ll clue you up at little or no cost at all.   Not knowing the basics is like driving in a car without a petrol gauge. The uncertainty causes stress and anxiety plus it’s downright dangerous.  

 

✓ If finance isn’t your strong suit or you haven’t had to managed business finances before - get some good independent financial and business advice from the start.

 

✓ The 4 biggest pressures on most startup businesses are Cash Flow, Cost of attracting customers, Late payments from customers, and access to finance/funding/overdraft

 

✓ If you’re running your startup right, you should know off the top of your head exactly how much money you’ve got in the bank, what’s owed to you and when you’re likely to get it, and what bills you have to pay and when.  This is what we mean by cash flow.

 

✓ Set financial goals and measure them at least monthly... use the dashboards on your accounting software and check them regularly

 

✓ Consider different business models and how they can impact on your financial health. The business model you choose needs to tie to the consumer pain point your startup is relieving, and work better than the competition’s. There are many different types of models out there, and it’s important to choose one that is best suited to your business.


✓ Get yourself a great accountant and make sure your relationship is a good fit. A good accountant is a business advisor and you should sit down with them regularly not just at end of year discussions.  Shop around - first meetings should always be free so you can check for fit.