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5 tips I wish I knew about when I started my business

From a start-up to a leading bookkeeping firm, it’s been an exciting yet exhilarating journey to Tailored Accounts. What have been learnt from the journey, we believe, is valuable for all entrepreneurs who are working on their start-ups.

Entrepreneurship

 1. Is the target market profitable?

While working at Australian Institute of Quantity Surveyors, Harry noticed how his clients who were small and medium business owners struggled with doing their own books due to the lack of accounting knowledge. Many businesses were simply unable to afford an in-house bookkeeper. Others, due to the small size, only needed a part-time bookkeeper but had troubles in finding a qualified staff that were committed to working part-time. 

Upon thorough analysis, Harry recognised that was a common problem among small and medium-sized businesses. Since there were around 25,000 SMEs in the ACT while the number of firms providing outsourced bookkeeping services was small, the market looked promisingly profitable. 

Backed up by his solid education background in accounting, Harry took a further step to set up his own business which provides outsourced bookkeeping services to SMEs in the region.

Takeaway

If you are planning to set up your own business, consider these 2 questions: Who are included in your target market? Is the target market big enough to be profitable? 

Answer for the first question will identify who your products or services will benefit and which problems they will solve. When you’re done with this, you could name the market’s features and characteristics, based on which your services could be modified to meet specific needs from the market and solve particular issues.

The second question will shed the light on the feasibility of your business plan. If the problems are limited in a small community, which would imply unprofitable plan or you will need to modify your services to meet broader audience and solve more general issues. And of course, ideally, the services or products provided are within your speciality and fits your background (good news is this is always the case!).

2. Do you make use of all possible channels to market your start-up?

Without external financial support, Harry needed to use all available low-cost channels to promote his start-up. His objective then was to create awareness of his business in the community. Gumtree, online forums, Yellow page, professional websites, just to name a few, were all used. 

For a B2B service provider, reaching decision makers in a business, that is business owners for SMEs, is essential. Harry set up his profile on LinkedIn – the largest professional online network – where he could connect with many business owners in town.

Takeaway

Start-ups have limited funding. They are either set up based on their own savings or using sponsors’ financial support (with conditions). Therefore, smart spending would be vital. 

For a start up, building awareness about its existence is priority. Find out where your target audience would normally go to for information and get involved. There are many sites with hundreds of visitors where you could upload your business profile on free of charge. 

Tailored Accounts on truelocal.com.au

Tailored Accounts on truelocal.com.au

Here are 5 free online directories you could upload your business profile on:

  1. Truelocal: http://www.truelocal.com.au/
  2. Yelp: http://www.yelp.com.au
  3. Startlocal: http://www.startlocal.com.au/
  4. Local: https://www.local.com.au/
  5. Hotfrog: http://www.hotfrog.com.au/

And don’t forget Google My Business or Bing unless you want to get left out in the dark. Additionally, make use of social media channels to get your business found. You could start with four major platforms: Facebook, Twitter, Google+ (since it helps much with your SEO) and LinkedIn. Certainly, having you personal profile on LinkedIn is much of help.

3. Is there any technological trend in your industry?

At the time Harry founded Tailored Accounts, desktop-based accounting was widely used in the ACT. Harry quickly recognised disadvantages of the system including time and cost for manual update, backup and maintenance, just to name a few. Besides, data took days to be processed, thus it was not real-time. 

As a tech savvy, Harry saw the new wave of cloud-based accounting coming in and decided to grab it. For big accounting firms, it might be a risky decision but for a start-up, that was a chance to get over competition and to innovate. About 80% of partners of biggest accounting firms are at their 50s, so they were obviously not open to experimenting with new technologies. That brought about the advantage of early adoption.

Thanks to the application, Tailored Accounts is now a cloud-based accounting expert in town. We are certified advisor of major cloud accounting providers including Xero, Intuit QuickBooks and MYOB, just to name a few. The adoption of cloud accounting also increases client satisfaction and referral rate since their books are well taken care of and data are more accessible and real-time.

Takeaway

Advancement in technology has become more and more apparent in our daily business life. Yet, many are ignorant of the change. A research by Intuit revealed that a lot of businesses still keep records using manual inputs, such as pen and papers (22%), spreadsheets (42%) and just 9% of start-ups use cloud accounting software. 

One of our friend, Trent Nathan, said: “As a start-up, you have the advantage of being flexible. And also, as a start-up, you are under much completion from big players. One way to get over it is to innovative, to embrace technological change or else, it’s your business that would suffer at the end of the day.”.

Don’t resist the change. Stay up to date with current trends in technology in your industry and also make sure your accounting system is technology updated too. 

4. Do you manage your cash flow?

A research by Dunn & Bradstreet (2013) revealed that 90 percent of small business failures result from poor cash flow. As an accountant, Harry fully understands the principle “cash is king”. 

To put it into practice, we constantly make sure that our customers are up-to-date with their cash flow or in other words, make sure they understand every inflow and outflow of cash. The cash flow model that we use is a working document which incorporates budgeting and forecasting, debtor management, creditor management, sales forecasting and cash projection. Our accountants start off each week by updating our customers’ accounts. After which, they run through the “budget vs. actual” report to adjust for incoming budget forecasts, and go through debtors, creditors and sale forecasts so as to give our clients a complete picture of their cash position.

Takeaway

Again, cash flow is a basic survival metric for a start-up. No matter how small your business is, you need to document cash flow projections. Manage every dollar you spend from the first day of the business, not until you are almost out of cash. You should also consider cash reserve, say by setting aside a small portion of your revenues in a reserve account since the chance of unanticipated expenses is high and it drain cash. 

Believe it or not, it is said managing cash flow is more important to your business than having the right idea and the right product. Outsourcing your books to a good bookkeeping firm at the early stage could be a good idea that saves your start up from flaming out till you reach the elusive break-even point. 

5. Do you have a first SMART goal?

When Harry founded Tailored Accounts in 2009, what he aimed to achieve is to turn the firm into a reputable bookkeeping firm in town, helping small and medium business owners with managing their books. Along the way, Harry learnt that the role of an accountant or bookkeeper does not have to only include helping with books and tax preparation. A good accountant should help run the business too. In addition, Harry believes that SMBs deserve to have access to comprehensive bookkeeping and accounting services just like big corporations. 

All these are translated into a goal of becoming the accounts department for small and medium business in Canberra. The adoption of cloud-based accounting technology and a team of highly qualified accountants and bookkeepers enables Tailored Accounts to provide a comprehensive accounting and bookkeeping package. Now being a leading bookkeeping firm, Tailored Accounts is on its way to become a trusted accounts department of Canberra business. 

Takeaway

As a start-up, you should have a goal which acts as the guideline for your business and clarifies what you need to do. The goal does not need to be big at the beginning but it needs to be SMART (specific, measurable, achievable, relevant and time-bound). Along the process of reaching your first goal, you build up your capacity as well and from that point, you will notice that your business is more capable of reaching more and more ready for bigger opportunity. Remember  “A journey of a thousand miles begins with a single step”.