Launching a new business is one of the most exciting and nerve-wracking endeavours professionals can take. From drafting a business plan and building a great team to nailing down the perfect office space and marketing strategy- startup success is all about getting the details right. And while there are many moving parts to a successful startup, ensuring your finances are in order is one of the most important pieces of the puzzle.
Without financial oversight, it’s easy to get lost, become overly optimistic about the earnings, or unnecessarily panic without cause.
That’s why we’ve put together five key tips for Oxfordshire startups to get their finances in order and ensure long-term success.
1. Have a clear understanding of your startup costs
Understanding your startup costs is step number one. Before you even register the business, quit your previous work and decide to take the plunge. You need to get your startup’s finances in order and have a clear understanding of all associated costs.
This includes everything from the cost of incorporating the business and legal fees to marketing costs, website development, equipment and office rental. Consider all the possible costs that may arise. Do your research to find all the bits you don’t expect to need but may nonetheless. Put everything on paper (or, more realistically, a Word doc), and then you can start to build a financial plan and budget for your startup.
2. Create a realistic budget and stick to it
Budgeting is essential for any business, but it’s especially important for startups. Once you have a good understanding of all the costs associated with launching your business, it’s time to create a budget.
For this, you want to be as specific as possible. Include everything. It’s always better to overestimate your costs than underestimate them. Assign pound values to each cost and project when these expenses will occur. This will help you track your spending, avoid overspending and keep your startup on solid financial footing.
3. Set up a business bank account
A business bank account is a must for any startup. Not only will it help you keep your personal and business finances separate (which is important for both legal and tax purposes), but it may also be a requirement for certain funding opportunities or government initiatives.
It makes tracking your spending, budget and cash flow much, much easier. It can also save you money. Whether you manage your own finances or you outsource this to an accountant, clear records save time. Time is money.
Look for a business bank account with low or no fees, offers good interest rates and the features and services that best suit your business needs.
4. Keep detailed records of all income and expenditure
Every business should keep thorough records of every penny coming in and going out. This level of detail might seem tedious, but it’s essential for crisis management and building a strong financial foundation for your business.
Good bookkeeping will help you track your budget, catch any discrepancies and make more informed decisions about where to allocate your resources. It will also be helpful come tax time. Make sure you keep records of all invoices, receipts and payments (both personal and business), and update your books regularly.
5. Outsource where possible
Whether your startup is bootstrapped or funded, outsourcing in the early days can be a smart financial move. Some roles and requirements can change significantly in the first stage of your startup. Rather than hiring full-time employees, consider outsourcing key functions like accounting, digital marketing, and website design.
Not only will this save you money in the short term, but it will also give you the flexibility to scale up or down as needed. When you’re first starting, it’s important to be agile and responsive to change. Outsourcing can help you achieve this.
If this makes you think it’s better to do everything yourself to save on costs, consider whether that actually helps you save.Â
6. Explore local initiatives that support your business growth
When in the middle of all the planning and day-to-day operations, many businesses forget to see what kind of support may be available to them. In Oxfordshire, there are often government initiatives to help you with funding. There is also a supportive community with networking events and different support services to elevate small businesses. These range from mentorship programs and workshops to promotion opportunities that get your business in front of the local business community.
All of these channels are a huge financial help. Remember, also, to really consider the value of non-monetary opportunities. Paid promotion costs money. Business consulting costs money. All opportunities to get this for free or at low costs will add up to keep your budget tight and accelerate you further ahead.
Start by looking at local government initiatives, business accelerators, and chambers of commerce programs. Many of these initiatives are free or low-cost.
Launching a Startup in Oxfordshire
If you’re based in Oxfordshire, you’re fortunate. Here there is a blossoming professional community. Networking groups meet regularly. Our business professionals are tight, and there is no shortage of other business owners happy to welcome you into the fold and share their own startup experiences. Check out OXLEP:
‘As the Oxfordshire Local Enterprise Partnership (OxLEP), it is our role to champion Oxfordshire’s economic potential, acting as a catalyst and convener to drive a dynamic, sustainable and growing economy.’
But finances come first.
If you need a helping hand with your business finances and tax, The MGroup is here to help. We work closely with the Oxfordshire business community, we’ve been a startup once ourselves, and we always remain up to date on initiatives available to Oxfordshire organisations.
Contact our team today.