It’s the middle of the month but I can’t resist saying…Happy new year!
Laying down procedures and making plans for your business is a great way to start the year. Some of these plans may include strategic hires you will need to achieve the goals of the year, setting up a better financial and accounting system, getting legal representation, registering your business name in Delaware, reducing operating expenses or building better relationships with your customers, employees and investors.
In line with the plans you may have made to improve business outcomes this year, here are some core aspects of the business we believe you should pay attention to, not just for the short term but for the repercussions it may bring if ignored and its benefits in the long run.
Founders who do not pay attention to the finances of their startups frequently find themselves in a lurch and may not realise how deep their financial problems run until it becomes late. Accounting is the process of keeping the financial accounts of a business. It is one of the ways to understand the state of finance of your business, and gives insight into your income, expenditure and profit; arming you with all the necessary information to make key decisions. In accounting, your income statement shows your profit and loss, the balance sheet details the financial position of the company at a certain date and the cashflow statement reports the cash generated and spent during a certain period.
Paying attention to this enables the founder to be compliant. This means that with a proper accounting system, liabilities such as tax, pension, etc are properly addressed and articulated. More so, accounting provides the data needed to make well-informed choices, especially as regards budgeting and future projections. It reveals what to allocate for each part of the business and what your finances are likely to be in the coming years; helping the founder to make adjustments where necessary. When accounting is ignored, the company’s financial viability is obscured and without accurate records or knowledge of finances, cashflow projections will be hard to track or project.
Most early-stage entrepreneurs pass over the legal needs of their business as most do not consider it urgent or of great importance and priority. For certain legal needs like incorporation, investment negotiations, contract drafting and partnership reviews, risk and reputation management and others, legal counsel is of great importance. Additionally, lawyers help founders understand risks that may occur with certain agreements and give counsel on appropriate measures to take to avoid the risk. Lawyers also assist business owners to understand the licenses required and the processes for obtaining them. Issues of intellectual property may arise and startups without legal counsel may get stuck in this. Regarding issues of privacy, confidentiality and data protection, getting the right legal advice will go a long way in helping you create the essential document required to support the digital presence of the startup.
During the fundraising process, lawyers also come in handy. They proffer counsel on the best investment option, the control you should own as well as board structure and appropriate voting rights.
The aim of every venture is to grow, beyond profit making. However, the focus on profit making alone can sometimes blindside founders to the need for growth and expansion. Growth can mean different things to different companies and includes introducing a new product or expanding an existing one, adding new locations, more customer acquisition, etc. It allows a business to acquire new assets, attract new talents, and funds, increase profit margins, etc. It is important to outline the key focus areas for growth and make actionable plans to achieve them. For people who are yet to understand growth hacking and how to go about it, employing the services of a growth consultant will be helpful. The consultant will examine the current status of the business, existing marketing places, create a growth strategy plan, carry out a market survey and research (especially when introducing a new product), decide on growth tools and requirements and the course of action to be taken, alongside the startup’s leadership.
Startups need to reach a large scale more quickly as growth is a criterion for longevity. It also helps startups stay competitive in their industry, scale quickly and provides financial stability. Ensure to pay attention to the growth of your business this year.
Getting started on the above listed can be a bit overwhelming if you do not have a firm grasp of accounting, have never considered getting legal counsel or have not prioritised growth for a while. Aidi provides a solution to this - with our accounting, legal and growth services, you can get a head start on focusing on these core parts of your business. Our services are personalized; designed to meet the distinctive needs of every startup at different business stages. Get started by booking a meeting with us through this link.