Business Start-up tips | Watch Your Pennies!
G’day, everyone. This is George Germanos from Alliance Accounting. Thank you for watching and thanks for signing in. Please subscribe to our videos if you like this one.
Look, I was just having a bit of a thought and I came across a good tip that I thought I could pass along to everyone else.
I was sitting with a client today, and we were running a few financials, trying to work out how their business is going to grow and a good point came across.
Now, a lot of people, a lot of new business owners that I come across, I’ve actually noticed and seen that they tend to think that sales are just going to come to them. They tend to leave a fantastic workplace where they’re really good at what they’re doing, and because they’re really good at it, they find that as a basis of leaving the workplace to start their own business. They soon come into a big shock when they realize that they’re going to have to go through two to three years with no income and potentially very little sales.
Now, a lot of people tend to think that just starting up a business, having a very good product or a very good service, being good at what you do, having some nice business cards and website is going to generate business. Now, the question is, how are people going to find those business cards? How are people going to find that website? That’s very important to think about when you’re actually running some figures, some costs, to say how much money you have.
I tend to tell a lot of people, make sure you’ve got a large amount saved before you go into business, the reason being is that business owners, especially new business owners will have to go for about a few years without earning a dollar. Chances are that by the time people pick up that you are in business, by the time people learn what you do do, why you’re better than others, why they should go to you and not someone else, it would be a few months at least by the time you get your first sale. Then you get your first sale, you’re too heavily involved in trying to get the processes up and going, then by the time you start making profit, chances are, you’re going to reinvest that profit into your business for the greater business. So be sure to expect losses for quite a while before you actually make a nice considerable gain.
So my tip to you is really calculate how long before you expect your fist sale. Obviously, businesses come into my boardroom and have meetings with me, thinking that they’re going to make a few hundred thousand dollars within their first year. It’s a bit hard not to laugh, I guess. You’re not going to make the big bucks straightaway.
Run your numbers. See how much yours costs are. See what costs you expect in your business start up. See what costs you expect personally. And then see whether you’ve got enough money in your bank account to keep you going for at least half year to a year without any additional income. That’s the big thing in business that you really have to calculate.
So I hope you enjoyed my tip. I hope you actually benefitted from that tip and thank you for listening.
As we mentioned in the beginning, please subscribe to our videos. Hopefully, we’ll be bringing you a few more good tips in the few weeks to come. So George Germanos from Alliance Accounting. Thank you.