START-UP TIPS FOR YOUNG ENTREPRENEURS

crowe-clark-whitehill-logoLooking after your cash and customers are key for start-up businesses, according to business advisors at audit, tax and advisory firm Crowe Clark Whitehill.

As having a great business idea isn’t a prerequisite for success, Crowe is backing Young Start-up Talent, an initiative promoting innovation, entrepreneurship, leadership and talent development, to help improve the chance of local businesses’ survival.

Young Start-up Talent is a community-based project helping 16-25 year olds with an entrepreneurial flair for business. The winner, who is due to be announced shortly after a ‘Dragon’s Den’ style final, will receive £50,000 worth of products and services from various companies to help them over the next 12 months, including support from Crowe’s Business Solutions team.

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Crowe Partner Darren Rigden gives his top tips for setting up a new venture.

  • A well-prepared and researched business plan is essential. Keep revisiting it, adjust it as necessary to keep focussed on the business. Have an exit and/or succession plan as it will focus your business plan and help ensure you maximise the value of the business.
  • Look after your cash – regularly review your cashflow and update and monitor your cashflow forecast regularly. Successful, fast growing businesses are vulnerable to overtrading and can run out of cash if not carefully managed.
  • Look after your customers – it is hard to win new customers but easy to lose them. Mistakes will happen, but resolve them quickly, acknowledge where you went wrong and make sure they do not reoccur. Your brand and reputation is one of your most valuable assets so look after it.
  • Value your suppliers – paying suppliers on time ensures a good relationship with them, and if cashflow becomes tight they are more likely to work with you when you need their help.
  • Appoint good advisors, who are prepared to spend time with you and are happy to talk through your ideas without raising a fee every time you contact them. If advisors are good they are worth paying for and will happily invest their time in you. If you cut corners the cost could be much higher further down the line.
  • Continue to develop your product/service. In reality, if you stand still you are likely to go backwards. Research your competitors, make sure you get ahead of them and stay ahead. An investment in researching and developing your product is money well spent (and may well qualify for tax reliefs!).
  • When the time is right don’t be afraid to allow the right external investor into the business. Giving up a stake in the business is worthwhile if the reduced stake is worth a multiple of your original stake. Investors can bring new ideas and experience to help grow the business.
  • Review the structure of your business as it grows. It may be right to start up as a sole trader, LLP or limited company, but as the business grows it may be appropriate to change the structure for planning and tax purposes.
  • Invest in a good accounting and IT system with a proper back-up process in case something goes wrong so that you can retrieve your records quickly with limited impact on the business. A proper disaster plan should be in place to cover key risks so if the worst happens, you can get the business quickly back on track.
  • Invest in appropriate marketing and monitor the success of your marketing spend. Try new ideas, developing the successful ideas and dropping those which do not appear to be giving a good return but always remember to take a longer term view.

Crowe, which has offices in Tunbridge Wells and Maidstone, offers services in audit, tax and advisory. For more information call 01622 767676.

 

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