Young Businesses Face Unique Challenges
Whether your business is in small goods manufacturing or establishing a private medical practice, the early years are crucial. There tends to be 4 key “Make it or Break it” areas:
1. The Right Business Structure
Here you take the first steps to ensure you are:
- Protected, and
- Not setting yourself up for a giant tax bill!
Which structure will best suits your needs now and in the future… Sole Trader, Company or Trust? It’s crucial to understand the tax and legal implications of the structure you put into place.
2. The Right Systems & Procedures
Which accounting (and stock) system will give the most value back to the business? There are enormous gains to be had here and you need to be sure that you implement a solution which gives you control and efficiency, so that you have the time to work on your business.
Similarly, there are procedural areas in your business which will either unlock profits (if done well) or tie up funds (if done poorly). Receivables (debtors) is a great example.
3. Controlling Cash-Flow
Cash is your fuel to survive! Even if your business is profitable, it could all turn to dust if you did you manage your cash-flow and you run out of money.
And it happens… You buy some stock, you turn it into your product, you make some sales. BUT you won’t get paid for 30-60 days, you still have to buy more stock, make your product, pay your wages, pay rent…and now you’ve run out of cash.
4. Securing Finance for the Business
To cope with fluctuations in cash flow, or to grow, you may need access to an alternate source of funding, such as an overdraft or a line of credit. Banks are becoming increasingly stringent in the way businesses must present information, (as we outline in “The Landscape is Changing”)
Even businesses with a competitive marketing edge can fall by the way-side as a result of one of the key areas above. So it’s no surprise that in Australia, some 50% of first-time operators will fail.
We Can Help Businesses, but not Statistics
We help businesses every day with these challenges to ensure they have the best chance to prosper.
Please feel welcome to contact Byron Factor to discuss your business without obligation on 07 3369 8544.