Starting your own business is a big milestone. You’ve probably been dreaming about it for quite a while, and now you’re finally taking the plunge and taking steps toward business ownership.
While congratulations are definitely in order, so is a bit of advice: plan carefully. Most successful startups have one thing in common; their founders took the time to formulate a business plan, and then acted on it. Their product may have happened by necessity or even accident, but their plan for success likely did not.
When deciding how to structure your business, obtain funding, and execute your launch, consider consulting with a financial expert. There are a lot of things to think about and a lot of hoops to jump through. Your business plan will be unique from anyone else’s, and that’s a good thing. However, a successful startup should be carefully planned and documented before you launch your business in the world.
Overview Of A Startup Business Plan
As stated above, your business is unique, so your plan will be, too. But whether your startup business will target a Southern Utah customer base or somewhere else, successful startup plans usually contain some common elements below.
An executive summary
Your executive summary should introduce potential partners or investors in your plan. It should be part of your bigger business plan but should be able to stand on its own as well. Many whom you present with your executive summary will make their decision based on the impression it gives them.
Your market analysis should tell readers why your product or service is necessary, who your audience is, and how much they’ll be willing to pay to solve their problem. Enlist the help of marketing professionals if necessary. However, keep in mind that professional help should be factored into your startup costs, or it may make a surprising dent in your available funds.
Your startup plan should include an analysis of who your competitors are, and what makes your product or service better. Tell readers how you plan to one-up the competition.
How do you intend to introduce your product to your audience and the general public? How will you advertise? How are you going to encourage people to purchase your product?
These questions are key in developing your marketing strategy, and you may need to allocate a certain amount of financial resources to gain the needed information.
This is a big one that a lot of people don’t consider when forming their startup plans. You must show potential investors or partners that you see the risks that lie ahead. Include an assessment of these risks and what you are doing to minimize them.
Your business plan must provide an analysis of your profit/loss and cash flow, and the data you used to determine them. Detail your funding needs and back them up with data that you may need help to compile. State how you’ll use your startup funds, along with possible investor exit strategies.
This is not intended to be a comprehensive list. Instead, these steps are part of a basic startup plan overview. By working with an accountant, you can receive far more tailored assistance.
Accounting Can Make Or Break Your Startup Company
No startup business plan is complete without clearly outlining how the financial side of the business will operate. This financial plan should cover the various aspects, from cash flow to bookkeeping tasks, which may not be the strong suit for many startup company enthusiasts. But consider this example.
Say that your startup is an eCommerce custom engraving jewelry business. Likely, you have accounted for the opening costs—website design and hosting, materials purchased, engraving and jewelry making equipment, etc.—but what you may not have considered is the ongoing costs of running a business, such as:
- How will you track when you have to reimburse an unhappy customer?
- What if the vendor you purchase materials from raises their prices?
- When you bring on employees, who will handle payroll?
- Do you have a method in place to account for ruined materials and remakes?
These are just a few of the financial questions that need answering. By working with an accountant, you can have expert help in future-proofing your business and keep from one of these financial issues from shuttering your business.
Why Bring In A Cedar City Accountant As Part Of Your Startup Planning
Now, many business owners believe that they need to wait before bringing in an accountant to help with their startup company. However, the truth is that the success of your startup can benefit greatly from having your local Cedar City accountant on your team before you even launch your company.
Review Your Financial Plan
If you have a financial plan already, bringing it to your startup company consultation is an excellent idea. Our accountant can review your existing plan and help fill in any gaps that may exist. If needed, our accountant can help redesign your financial plan to fit in with various projected concerns.
Should you not yet have a financial plan for your startup, you don’t need to worry. You can work with our accountant and create a financial plan from the ground up and feel more confident in its viability.
Business Revenue Structure
Most people are familiar with the sales-basis of business revenue recognition, where goods or services are exchanged for money. However, there are several revenue recognition strategies that may work better for your startup company. With the help of our accountant, you can choose the right revenue recognition strategy that will help your company grow.
Help With Legal Aspects
There are many legal aspects of establishing a startup that our accountant can help you complete, as these steps impact the financial side of your business. Some ways our accountant can help your startup’s legal needs are:
- Apply for federal employer identification number (EIN) and your Utah tax ID.
- Determine business entity structure (LLC, sole proprietor, corporation, etc.)
- Ensure licenses and permits are applied for and properly registered if needed.
- Open a business banking account and help apply for business loans.
Also, when it comes to choosing your entity structure, don’t dwell too much on whether the structure is right for your future hopes. At the time of the entity structuring, our accountant will advise you on the best fit.
However, that doesn’t lock you into your business entity structure. If later a different business entity structure will suit your company better, our accountant can help with the entity restructuring process.
Assisting With Startup Budget
It can be difficult to establish a realistic budget for your startup, especially if you haven’t gone through the process before.
Even if you have launched a startup before, if you are going to be entering a different industry with your new startup, it can help to have our accountant review your budget.
Establishing Accounting System
Before you invest much more into your startup, it is essential that you have an accurate and reliable accounting system. From tracking your costs to revenue, you need to have detailed financial information for everything related to your business. In part so that you can attract investors and draw up accurate business plans, but also for when you need to file taxes.
By working with our accountant, you can establish an accounting system that can grow with your business. Everything from setting up your bookkeeping needs to regular financial reports is best done before you are drowning in paperwork.
Work With A Local Accountant
It is easy to download accounting software and attempt to take care of your startup company’s accounting needs on your own. However, new small business owners can run into pitfalls this way, as accounting software is more general and may not account for local laws.
With a local Cedar City accountant like ours, you can trust that you are receiving the most up-to-date information on the local, state, and federal laws that apply to your specific industry.
Also, once your startup business is established, there are many other accounting services you can utilize to help ensure that your startup company thrives.
AA Tax & Accounting Service Can Help Your Startup Thrive
Only 56% of startup businesses make it into their fifth year. Some of the top reasons why these businesses failed were issues with money, whether running out of money or issues with pricing and costs. But, by working with our accountant, you can iron out those issues before you launch your startup and start your new company off on the right foot.
If you would like to work with our accountant to have their hands-on assistance with your startup company planning, feel free to contact us today to make your appointment.