Each year, hundreds of thousands of new entrepreneurs launch their own ventures – most of which begin with small businesses. Starting one’s own business is the dream of many, but without proper planning and assistance, this dream can quickly turn into a nightmare. For the first few years of a business, assistance from an experienced Toronto accounting firm is necessary for success. Take the right precautions and steps from the get-go to ensure the longevity of your venture. Here are some of the challenges of starting a business.
Starting a Business
It all starts with one great idea – whether it is a service or a product that you’re thinking of selling. Unfortunately, the truth is a successful business needs so much more than one great idea. Even though it is highly marketable, tons of planning has to be put into place. You have to cover all details in the business plan, including what you’re selling, who your target market is, how you plan on marketing this product, who you’re hiring to work for you (or with you), and – most importantly – financial information.
Many entrepreneurs hate having to tackle financial planning, and consider it as one of the biggest hurdles when starting their own business. The good thing is that if you’re not equipped to handle these money matters on your own, there are a lot of Toronto accountants who can take the load off your hands. You can worry less about financial projections and statements and focus more on your product. In addition, having a CPA on your side will give you more credibility if you’re thinking of adding more investors or if you’re taking out loans.
The fact is that money takes a big chunk of your plan. Generally speaking, finances will be split into two main groups: one-time purchases and recurring costs. The former includes equipment, furnishing, business and legal fees, and the costs of business registration and licensing. The latter includes inventory costs, rent, utilities, salaries, and supplies. All of these expenditures will rely on your monthly sales.
Determining Your Budget
Your Toronto accountant will come up with a projected budget for your start-up costs. This budget will come from information from a variety of sources – competitors, vendors, and even landlords. It will let you know your limit for your business, at least initially.
The next step is determining how to pay for these costs initially – prior to making any income. A lot use personal savings, while some take bank loans or look for possible investors (usually as an exchange for partnership or part ownership). All of these things can be taken care of by your Toronto accountant.
Once the legal and financial sides of things have been handled, you can enjoy the freedom of operating your own business and concentrate on improving your product.