Considering a startup?
It can be an exciting and daunting time when you start to consider the broad picture of everything that needs to happen to make it a reality. From logos, business cards and websites, to bookkeeping, products, procedures and marketing the excitement and romance of a new idea can turn to fear or a feeling of being overwhelmed quickly, so how do you know if you are setting yourself up for success in today’s market?
The Bureau of Statistics shows there are 2.1 million small businesses in Australia. But starting one and, more importantly, keeping it afloat is never smooth sailing, with 60% ceasing to operate in the first 3 years the outlook can feel like the odds are stacked against you.
Cashflow issues, growing too quickly and/or lack of knowledge are regular culprits of discontinuation of business here in Australia. The Australian Securities and Investments Commission released a report into corporate insolvencies for 2011-2012 that found 44 percent of businesses suffered poor strategic management, 40 percent had inadequate cash flow or high cash use and 33 percent suffered from trading losses leading to closure.
Small business is not the only victim
Recently here in Brisbane and Ipswich, we watched the collapse of the Little Tokyo 2 co-working space empire headed by Jock Fairweather. The firm went into voluntary liquidation stating pricing at other co-working spaces as the trigger.
Future proof your business
So where to from here? As accountants, we see the books in black and white because that is the way tax law works. We consider planning for grey areas to be the best way to strategically ensure you are well equipped to take on any bumps in the road. While the nature of entrepreneurship might have a reputation for the ‘fly by the seat of your pants’ the truth is careful planning is what will keep you afloat.
Need help planning your venture?
We can help! Whilst Our job isn’t to tell you whether or not you should kick off your startup idea it is to provide you with the information and advice to understand all the possible outcomes of your decisions, so you can make an informed decision heading into it.
If you are looking for business planning services or due diligence, connect with the team here at JSM Accounting Group today on 07 3814 6512 or visit us online at www.jsmaccounting.com.au.
References:
Little Tokyo to in collapse
https://www.smartcompany.com.au/startupsmart/news/little-tokyo-two-collapses/
How To Future Proof Your Business – 8 Proven Strategies
https://www.profitbooks.net/future-proof-business-8-proven-strategies/