Words by Donna Torres, Director of SMB at Xero
Starting a new business is exciting. Though sometimes startups can get carried away and expand too quickly, without establishing a stable jumping off point first. Here is some advice to help your startup grow, at the right pace for your business
Compared to two decades ago, it’s far easier now to set up a business on a much smaller budget. It’s still the case that more capital leads to faster growth. This could turn out to be a key competitive differentiator in a new market.
Some banks view loaning to startups as a high risk. Alternative platforms, such as iwoca, can be used, which lends to small businesses and offers fast and flexible credit facilities.
You could also be eligible for the government-backed Start Up Loan programme, which allows a business to borrow between £500 and £25,000 with a fixed interest rate of 6% per annum.
Other routes include venture capitalist firms, an angel investor or a crowdfunding platform. Small business loans are highly sought after, but with the right business plan and approach, you’ll be in with a chance.
Get a good accountant
Recently, Xero petitioned to change the definition of the word accountant to reflect their advisory role. Accountants are no longer just number crunchers. They now hold an essential place in businesses’ development and can provide invaluable advice when it comes to expanding.
They can advise on tax breaks, as well as the latest tax legislations. In April 2019, businesses above the tax threshold will have to submit their VAT returns digitally. An accountant can recommend a compliant cloud accountancy software, such as Xero and make sure that you’re prepared for these kinds of changes.
How do you stand out?
Before you expand, you need to ask yourself a few questions:
- What makes my business unique?
- How can I effectively showcase my unique selling point?
- What are my competitors currently doing/not doing?
- What do I want the consumer to feel when they think of my company?
Once you feel you can satisfactorily answer these questions, it’s time to create the story of your brand and establish your next steps to get your product on the market. Brands with a strong sense of identity will stand out in a saturated market.
Stay up to date with the latest technology
There is no avoiding the fact that technology is now an integral part of business, whether it’s the use of social media tools, digital infrastructures or cloud technology. The majority (94%) of businesses using cloud-based technologies benefit from it, so consider moving your business on to the cloud if you haven’t already. This allows you to adapt quickly when expanding and developing your business.
Cloud accounting softwares like Xero can be used to automatically chase payments, provide financial analysis, generate POs/invoicing and more. Artificial intelligence also has a crucial role to play in saving you time and money. These technologies will save you time that would have been spent on administration tasks, giving you more resource for other aspects of the business.
Your first hires are really important
While a CV can be extremely useful when comparing candidates, don’t be afraid to look beyond it and consider an applicant’s attributes. Attitude is extremely important when it comes to new hires. Ambition and enthusiasm is invaluable in an employee. Take a candidate out of their comfort zone to see how they react and cope.
Enthusiastic employees will set the precedent for future hires. Working for a start-up isn’t for everyone, so flexibility in a hire is essential here.
Stay up to speed
It is crucial when you are expanding to take a step back and decide how you want your business to evolve. While start-ups have the advantage of speedy reaction time, it’s important to note customer feedback, competitor activity and current affairs. You can then take maximum advantage of this flexibility.
Born in the cloud, Xero is a beautiful, easy-to-use platform for small businesses and their advisors. The company has 1.6 million subscribers in over 180 countries and a thriving ecosystem seamlessly integrating with 700+ apps. On the inaugural 2018 Financial Times FT1000 High-Growth Companies Asia Pacific list, Xero was the fastest growing tech company in the $200 million+ segment. Xero won the Small Business Accounting, Practitioners’ Choice Award at 2018 Accounting Excellence Software Awards in the UK.
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