28 Jul Financial errors that could impact your start-up
Starting your own business is an exciting yet often overwhelming task, so it’s important to make sure that you are making the right financial decisions throughout the process.
In this blog, we’ll be taking a look at a few of the most common financial errors that could harm your start-up.
Poor cash management
Cash management is one of the most critical tasks your company needs to handle, but it is particularly important for you to start to look for additional funding if you have a limited window to reach your next financial milestone. In order to optimise your cash management, it’s essential to ensure that you regularly update your business forecast and ensure that your goals for expenses and revenue are realistic. Make sure that you have a complete understanding of your cash conversion cycle. With overly optimistic forecasts and a lack of good planning and financial expertise, your business could be destined for failure.
Failing to adhere to regulation and compliance
Compliance and regulation are not only associated with huge enterprises and public companies, but they also apply to small businesses too. It’s important not to underestimate the list of compliance and regulation requirements you need to adhere to as it is ever-growing, and includes GDPR, labour laws, tax returns and more. Depending on your industry or line of business, you could also be subject to other specific regulations, regardless of the size of your company. Partnering with a start-up accounting expert will pay off in the long run, as failing to comply could result in the closure of your business.
Not focusing on profitability early on
It is essential for every start-up to have a profitable and sustainable business model in place, otherwise, every new customer you acquire will increase your losses and bring you closer to bankruptcy. Generally, the money from each of your sales needs to be able to completely cover all of the direct costs linked to manufacturing the product or producing the service with the addition of a healthy margin.
If you’re in need of start-up accountancy services in Manchester that you can depend on, get in touch with our team at SQK Accountancy today.