Taking the seed of a good idea and growing it into a business is the first step that many start-ups take. While having a potentially groundbreaking product or offering is one thing, understanding that any decisions the company makes at the beginning of its life will likely affect it further down the line is critical.
It can be in a set of philosophies or even in how the company manages its capital, but setting the right foundation to begin with can go some way to ensuring long-term success.
On a mission
It may seem complicated at first, but getting the ideals of your business down on paper can help you develop a better sense of where you are currently, and your potential in the not-too-distant future.
The first step is to have a thorough and effective mission statement in place. This document will be a summary of your enterprise's goals and will signal what you're really about to suppliers, customers and employees alike.
While it can remain succinct, any good mission statement will be as encompassing as possible. It should look at every corner of the company and leave no stone unturned. The breadth of products and offerings, marketplace potential, relationships with other businesses, use of technology and - most importantly - the financial position of the organisation should all be included.
The aim is to be as creative and as niche as possible here, as after all, your businesses uniqueness and ingenuity will be one of its biggest selling points. No two mission statements are the same and drafting yours with both the short- and long-term future in mind can really help launch your endeavour on stable ground.
After the company's core values are down on paper, the next hurdle for any owner-managed business or start-up enterprise is to get a structure in place that maximises wealth and continually boosts company capital.
First of all, it may sound a little cliched, but one of your best assets is time. If your business is still in its relative infancy, you'll spend huge swathes of each day traveling to and from meetings with financiers, suppliers, commercial property agents and so on.
While many of these will no doubt be of critical importance, trimming your diary can really help keep your endeavour in good financial health. Why? Because meaningless meetings and appointments get in the way of the things you really should be doing and, after all, time really can be money.
Whether you're a sole trader, in a partnership, starting a company or setting up a trust, addressing which structure you need and want to follow is next. If any company fails to do so, the consequences will ultimately be an entity that has no specific direction or identity, and thus a limited ability to keep any finances in check.
Tracking spending throughout this process is also important. Funds may be limited at the start of any enterprises life. Consequently, there can be big implications upon the quality of services you offer - and with the taxman - if there are failings in the company accounts that stretch back to very early days of the enterprise.
Again, the practice of effective budgeting and thorough and accurate measures of cashflow are core principles that should be built-in as cornerstones of any business, regardless of sector.
Meeting financial objectives
While it's incredibly important to ensure that your company's ideals are on paper, being ready and prepared to best manage enterprise capital is what sets the best start-ups and relatively young organisations apart.
Having a realistic financial forecast in place can be first step along the path to efficient cashflow. Include sales projections, spending by department and outlay on acquiring any mission critical business assets.
Try and update predictions every month if possible, or at least every quarter. This will allow you to gain an accurate representation of exactly how the company accounts are looking, and then channel this information into assessing whether objectives are being met.
While many businesses may try and go through the process alone when setting the foundations for their endeavour, there is no substitute for expert advice. At WMC Accounting, we have a long history of supporting enterprises that are getting themselves off the ground, lending a helping hand along every step of the journey towards financial stability.
We aim to cut out the jargon and offer honest, realistic and implementable advice that can not only positively influence the financial outlook of your company, but also form part of the foundations of how you manage your business going forward.
We are committed to and take pride in our high standards and have developed a culture that is equally innovative and motivated. Could you benefit from such principles? Contact us today and ensure that the foundations of your business are solid enough to remain secure long into the future.