Whether your business is small start-up or a large-scale operation, meeting your financial obligations is a key component of any successful company.
As with most start-ups, you are the CEO responsible for all functions within your new company. It’s you who has drafted up the business plan, conducted research on how to distribute your product or service, and have also determined the best method to reach your target customers.
You are the one in charge of finding new business, sales, marketing, customer service, administration, and accounting. In the beginning, you may launch your business with limited resources, but you do it fuelled with the passion to get your company started and up and running.
Managing the process on a shoestring budget, you don’t want to spend your resources on an expensive car or overpriced office space. It is much more prudent to use your funds to pay yourself a reasonable beginning salary, as the company’s only employee, or draw minimal amounts of money from your business account.
As You Grow
When your business starts picking up, and you are busier than ever, it will be difficult to handle all the responsibilities on your own. Although I’m sure you have the enthusiasm to want to take care of everything, and feel confident it’s being done right, you’re eventually going to have to employ other qualified individuals to help with the different functions of your business.
It’s important to realize when you are at the point where you can’t do it all anymore. If you wait too long, and get overwhelmed, certain things might start to slip between the cracks. Oftentimes, the financials won’t get the detailed attention that is needed because they are the least fun, most time intensive, and the most complex part of the business. This is one area you do not want to get overlooked – extra attention is needed to the financial area of your business.
As your company grows, so too do your financial responsibilities. With revenue being received, and expenses needing to be paid on a regular schedule, you can’t afford to be caught off-guard and fall behind on your financial responsibilities. This is especially true as you start to employ people to help you grow your company.
With the addition of staff comes the responsibility to other people. In addition to their wages, you must make sure your PAYE systems are set up effectively. Between recording accurate hours, overtime, holiday pay, sick pay, any special leaves, and fringe benefits, you’ll want to ensure that this part of your financials is set up correctly. Also, ensuring that all tax rates are correct for each employee, appropriate deductions are set up (such as ACC levies), as well as establishing public liability insurance, property insurance, equipment, and professional indemnity insurance, it will be important to make sure that your financial responsibilities are set up and implemented correctly.
While the financial part of the business can get complicated, it’s critical for your overall success that special attention is paid to this part of your company as it grows.
Be Smart & Proactive
You may not have the mind of an accountant or born with a natural inclination towards “the numbers” but that does not mean you, as the owner, do not have a responsibility to make sure your financials are set up and attended to properly.
As the owner, you are ultimately responsible for all aspects of your business. Not only are you legally obligated to ensure that all the financials are handled within the laws, but you are also responsible for your employee’s financial lives to some degree. Your staff depends on you to pay their wages, taxes, etc., so that they can support their families. They have mortgages or rent, transportation costs, and feeding their families that are a direct result of their pay from you and your company. They trust and rely upon you to pay them so that they can take care of their family.
By not keeping up on your financial responsibilities within your company, you not only jeopardize your business but the livelihoods of your staff. If a company does not pay their taxes, or have responsible oversight over their business financials, companies can go out of business. Though it may sound extreme, unfortunately it does happen. Keeping a close eye on the financial aspect of your business helps not only your employees, but also YOU.
Prepare for the Future
As your business starts to take off, prepare properly for your company’s future by being proactive. Find the right person to oversee and set up your financial systems right from the beginning, to ensure your long-term success. This will be one of the most important decisions you will make. Whether you are naturally a numbers person or not, as the owner you need to oversee all aspects of your company. Make sure that you find the right person to help you by keeping a keen eye on the financial aspect of your business. It will not only provide you with peace of mind, but it will ultimately make your life easier.
Insuring your Start-Up
Protecting your overall business is also critical. In addition to your finances, your complete start-up needs to be properly insured to protect all that you have built. Comprehensive business insurance is tailored to each business's’ needs so it is essential to both compare and have assistance in understanding your unique requirements.
It’s critical to identify and maintain suitable business insurance for your company. Quotes for insurance can be obtained from a range of sources. You can contact the insurance companies directly, however this generally involves a lot of running around if you want to compare quotes from a variety of insurers.
A better option for many business owners is to use an insurance broker or adviser who can obtain quotes on your behalf from a wide range of companies offering insurance. BizCover has access to a network of insurance companies and can quickly provide you many policy options to choose from to secure the most suitable insurance to your business.