There’s a lot going on when you’re at those initial stages of startup life - the excitement of getting started, and the search for funding and partnerships to name a few - and it’s easy to get carried away. It’s also easy to focus on saving as much money as possible, on bootstrapping, and thinking you can do everything yourself.
Yet, the best and most successful startups know when to ask for a bit of help - especially when it comes to finances. And, ironically, one of those expenses can actually help you save much more money.
Working with a startup accountant can help your business in numerous ways. Here’s just a few.
Writing a business plan
Before you go anywhere, you need to have a business plan which sets out your strategy and action plan. It typically covers the next one to three years, and explains your objectives and how will you achieve them. Once written, it becomes the benchmark for your business performance.
This plan can sometimes be aimed not internally, but externally - such as attracting business partners, distributors and agents, or raising money through debt or equity. Whoever it’s aimed at, though, you’ll need to be detailed, and that means including detailed financial forecasts and assumptions. It should also be grounded in reality, which means no over-optimistic sales forecasts.
A startup accountant can provide advice on writing the business plan, and - given they’re not emotionally invested in the business - they can work with you to ensure those financial forecasts are indeed realistic.
Preparing for funding
If you’re at that stage where you’re looking for angel investors for your seed round or series A funding with a venture capitalist, those investors will expect a few things from you. Top of the list is a strong business plan with transparent financials.
Seed money can be raised incrementally and with much less paperwork than series A; with the latter, you need to convince an investor to lead your round. But at any stage, you need strong and sound financials presented in a way that makes immediate sense to the investor.
This is where your startup accountant comes in. They can help ensure your financials are in order, presented in the right way, and get you ready to knock those investor socks off.
Growing your business
Research suggests half of all UK startups fail within five years; the biggest barrier to growth is the tax system, with 44% of SMEs cited it as their main concern.
As you move through from seed to series funding, your accountant can help ensure you’re on the right side of that fence. As a trusted advisor, your startup accountant can help measure business progress in a way that links profit with your business processes. This makes it easier to identify any areas in the business which need improving. They can help you monitor cash flow and keep financial issues in check - plus, of course, do all the regular filing to ensure you remain compliant with local regulations.
The biggest benefit for startups when it comes to working with an accountant is that they are somewhat removed from the day-to-day operations, and they’re not as emotionally vested in the business as you, the founder, are. That perspective is important when it comes to providing guidance for the future.
The benefits of hiring a startup accountant
When you’re in the thick of building a startup, there’s a lot going on and even more to remember. But if you miss a filing, it can cost you – a lot. Focus on building your startup, and work with a specialist startup accountant to get you incorporated, get you operational, and help you to grow. They can:
· File the personal tax returns of the company’s directors
· File the annual confirmation statement
· And, of course, provide the advice that gets you growing