The key to any successful start-up business is without a doubt the idea on which it is based and the drive and knowledge of the entrepreneur behind it. Without a great idea or product it is extremely difficult to build a business and any number of people who try to start a business fall at this first hurdle.
What is less well publicised is that just as many potentially great businesses fail for entirely avoidable reasons and often the main problem is a lack of solid financial control from the outset.
Entrepreneurs are often ideas people who focus entirely on the quality of their output and how it will benefit users. What they may be less experienced in is dealing with what might be seen as more mundane matters, be they legal, administrative or financial. This can lead to problems from the start or, more distressingly, once the business has started to grow. It is essential that the foundations are solid from the beginning.
Every entrepreneur must consider a number of things from a financial governance perspective when starting or developing a business and just as others will take their advice in areas of expertise, they must not be afraid to ask for help. How should the business be structured to safeguard its assets and to allow value maximisation or investment? What do I need to deliver from a statutory and legislative point of view and when? How do I prepare accounts and deal with the tax man?
Exciting? Not really. Essential? Absolutely.
A business with solid financial foundations is easy to scale, investment ready and flexible for both the owners and its other stakeholders such as customers, suppliers or finance providers. It will be treated fairly by the authorities and create more opportunities as a result of its obvious focus on control. The exact opposite is the case for those who choose to ignore this cornerstone of business.
The message is simple. Speak to an expert, get the financial foundations in place and watch your business grow.
If you'd like to get in touch please contact Alex Tait, Partner, Baker Tilly T: 0131 659 8300 E: alex.tait@bakertilly.co.uk
