It doesn’t matter whether you are aiming to set up a business focusing on social media marketing, implementing digital strategies or honing the traditional methods of marketing a la billboards and radio jingles, there will be some initial financial concerns that you need to consider. When constructing your business plan, your prime focus will be your funding. However, you also need to look at your cash flow, your savings, your personal liabilities and your gross and net projections for at least your first three years of trading.
A business plan should be a working document. It should never be a pristine word processed document, only to be filed away and never seen again. A business plan should be well thumbed, covered in notes and be by your side at all times. This plan should be your bible. A business plan is also an effective way to hone your ideas, work out your USP and develop your business vision. Any investor will be keen to scrutinize your business plan to within an inch of its life. Keep it written in plain English, concisely and without waffle. The layperson should be able to pick up your plan and understand what your business is all about. Take a look at how you can address every single financial concern you may have within this working document.
Funding
The amount of funding you need to source initially will vary depending on the size of your money making venture. If you’re setting up a business with very little savings in the pot, fresh from full time employment, the chances are that you are looking at a business loan from your bank manager. You can make an appointment and pitch your business idea to an individual specializing in commercial investments. You must make sure that you know your figures inside out and that you have accurate and realistic financial projections. Without a realistic and objective viewpoint, your profit projections can seem wildly optimistic. This does not make you a sound financial investment.
Instead, do some market research and check out your competition. What profits have they made for the past three quarters? Were there any dips? Why? You must address and mitigate any risk that you may face. If you are looking at seasonal revenue, how are you going to account for the lulls? This is not necessarily a negative aspect of your business, but it is something that needs to be addressed as this shows off your business acumen.
You may not seek the traditional method of funding to opt for something a little more off piste. By seeking out a business angel to pitch to, you may secure investment from a leading industry professional. Alongside their monetary investment comes their knowledge, experience and network of contacts. When pitching make sure that you know your figures inside out. Know your gross from your net and prepare to receive a bombardment of questions. After all, this is their money that they are investing so they want to be sure of a return on their investment. Have a haircut and get suited and booted, ready to impress and enthuse.
Cash Flow
You must walk before you can run with a marketing business. If you looking to set up a social media management company in a freelance capacity, you must make sure that you have the capability to provide the services that you quote for. Taking on lots of orders for compiling digital marketing strategies is wonderful, but you must be able to provide the services within the set time frame. Being late, not updating social media posts and failing to turn up to meetings can result in poor reviews and no payment. This will not only be at the detriment of your marketing business but it will also lead to ruin.
Start small and look to expand at a later date. It’s important that you can develop a positive reputation and become renowned for providing exceptional client experiences and having a real impact on business results. If a company wants more traffic directed to their website, make sure that you can achieve this. If they want to enhance their profits by twenty per cent in the next quarter, and you promise that you can achieve this, make sure that you do. By showing tangible results, you will secure repeat custom and new clients. This bolsters your cash flow and gives you the room to reinvest and expand.
Set Up
It’s imperative that you set up your company in the most tax efficient way. By looking to form an LLC, you are separating your business liabilities from your personal ones. You can pay yourself a mixture of salary and dividends to ensure that you pay minimal yet fair tax. This means you can retain more of your profits to reinvest and help grow your startup.
If your business does accrue debts, you won’t have to worry about losing your home or having to declare personal bankruptcy as your finances are split and separated. This can lead to a greater sense of financial security. The alternative is to work as a sole trader which can be simpler when managing your financial record keeping but won’t be anywhere near as efficient tax wise.
When you set up your own company, you have to relinquish all of your responsibilities as an employee. As you grow, you may even become an employer and have to lead by example as a boss. Your concerns won’t be solely financial, and you will have to look at recruitment, HR, employee regulations and their finances. Being an employer means your financial concerns begin to include payroll and pension obligations. This adds a whole new dynamic to your startup as you grow and expand.
Never rest on your laurels and ensure that you wave goodbye to your steady wage, promotion prospects and excellent work colleagues as an employee knowing that you have prepared for your startup launch with a solid business plan. Addressing your financial concerns at this early stage means that you will maximize the chances of success for your marketing business.
