Over the years we’ve supported many start-ups, some that have gone onto huge success on their own (Zoopla is now a household name, PeoplePerHour is an internationally known brand), some that have migrated globally via way of a buy-out (Shutl was the subject of a purchase by eBay) and others that are still in their growth stage with exciting futures.
The companies we work with have engaged us because they’re too small to hire a finance team but they still need the range of tasks completed that a finance team does. They get great book-keeping, they get their sales invoices raised and credit control done, their payroll is run every month so their employees get paid on time, they meet their statutory obligations and they have good reliable accurate financials, as well as support and advice. All for a fixed fee that’s incredible value for money.
There are a few things that the hugely successful start-up has in common when they’re dealing with their finances, and we thought we’d share them with you.
Be an early adopter and don’t cut corners
The most successful businesses invest in their finance and administration. Don’t wait until the finances have got on top of you to find finance support: you’ll lose your paperwork, you’ll forget what you’ve spent and why, and you may fall foul of HMRC rules. Get it right from the beginning; a good finance team will grow with your business and take the legislatory headaches away. Plus, when you need investment, or are faced with a due-diligence audit, you have everything you need at your fingertips (or at your finance team’s fingertips) and don’t have to try to recreate it in a last minute rush. Looking after the finances isn’t what you do best (or if it is, do you want a job with us?!).
Know your finances inside out
Understand your KPIs, know what your turnover (if any) and overheads are going to look like, so you can spot immediately if there are any issues. Have certainty as to what expenses are going into each pot so you can budget and track variances when the costs start mounting. Having said that…
Don’t get too involved in the nitty-gritty
Sounds like an oxymoron, but it isn’t. Your finance team will prepare your bank reconciliations, your expenses reports and allocate your transactions, they’ll account for the VAT correctly, they’ll make sure your PAYE is correct. This takes you back to the first point – if you’ve got a good finance team around you, you need to trust that they are doing it correctly. If you don’t trust them, then they might not be the finance team for you.
Build a great financial model from the outset, one that is adaptable and versatile
…and don’t be afraid to change it; business and the economy change all the time; the model for your business may not be the one that you end up creating. Zoopla was started with the intention of becoming an online estate agency and although it has firmly entrenched itself in the property market, it could hardly be further from the origins yet in the same industry.
Get your processes right from the start and always look ahead
Not just in finance – get your employee contracts drawn up by specialist HR; there’s little in business that’s more soul-destroying than having to fight an ex-employee who was never much good at their job, because you didn’t have a grievance procedure to follow.
Get the right finance team around you and communicate with them
You know if you are going to have a massive bill coming through: maybe you’ve done some serious marketing campaigns but your finance team can’t account for this or plan the cashflow unless they know. Maybe you’ve just hired a new CTO – they will be pretty upset when everyone else gets paid and they’re missed.