5 tips for getting your finances in order before you launch your start-up
Why financial planning is integral to business success
Discovering that elusive business idea can make you feel invincible – like you’re ready to hit the ground running and get on with making your genius concept a reality. However, smart business start-ups know that whilst coming up with a really great idea is important it’s only one piece of the jigsaw.
There are many more aspects of preparation that need attention before you launch your business or make your first transaction. And as any good boy scout knows – failing to prepare is preparing to fail!
One vitally important piece of the business start-up jigsaw is money. Even the cheapest business ideas will need some funding. Follow these five easy steps to getting your money in order, to give your business idea the best chance of getting off the ground:
1 – Look at your personal finances
It’s crucial that you get your own house in order before complicating matters with business finances.
Depending on what type of business you set up, your personal and business finances may or may not be legally linked, but, legality aside, some cross-over is inevitable, especially in the early days.
Take a look online at a credit rating service like Credit Expert reports to check your credit history. Any outstanding issues should be cleared up, and unpaid bills paid! You want to start your business with a clean financial slate and going through your credit report is the easiest way to see if there’s anything that needs attention.
2 – Do your sums
You’ll need clear figures for any business plan, but it’s wise to do your sums as early in the start up process as possible, to determine whether you have a viable and realistic business. You can use our Startups business planning template to help.
3 – Investigate your funding options
If your projections reveal that you need some additional funding then there are several ways in which to obtain this. You might want to get a business loan or overdraft, or seek external investment or funding.
Your personal credit score, as calculated by lenders, will play an important part in what funding is available to you, so the cleaner your credit history the better (see tip number one!).
4 – Set up business banking
Keeping your personal and business finances separate from the beginning is a wise move, so compare business bank accounts online. Free business banking is available from many providers for a set period – so find the deal that best suits you.
5 – Keep clear and thorough records
Keeping your finances in order from the start will save headaches down the line, so be sure to keep proper records from the very first pound. Remember that you will need to file business accounts with HMRC, and whether you plan to invest in an accountant or self-certify, you’ll need clear records to work from.
Having your money in order will give your business idea, however brilliant, the very best chance of success. Follow the above steps for a firm financial footing, from which your start-up can grow and flourish.