Starting a business

Many startups begin with a clever idea, or a new technology or feature. However, this can, in effect, turn out to be a solution that is in search of a problem. However, customers buy relief from their problems, not admiration for solutions.

So, a good approach from the outset is to clearly define:

• Who your customer is.
• What problem do they have.
• Why existing solutions are insufficient.

This matters because growth usually comes from solving a real pain point better than alternatives, not from adding more features or marketing harder.

If customers are not willing to pay (or meaningfully engage), scaling later will be difficult regardless of how polished the product or service becomes.

Many businesses fail not because they are unprofitable, but because they run out of cash at the wrong moment.

Paradoxically, a growth business often makes cash pressures worse before it makes them better.

So that you can avoid unexpected cash shortfalls, it pays to regularly forecast your business’s cash flows. This means to looking to see when money will actually come in and go out of your bank account.

Forecasting cash flows and being realistic when you do, allows you to spot shortfalls before they happen.

Knowing where a cash strain is likely to come from allows you to plan how to deal with it.

In the early days, the person who founded the business tended to do everything themselves. While this is normal, growing the business will require you to gradually replace your personal effort with repeatable systems that others can follow. That includes:

• Clear processes for sales, onboarding and delivery.
• Basic financial and performance reporting.
• Consistent ways of handling customers and issues.

These do not need to be complex. Simple checklists, templates and shared tools can dramatically reduce errors and free up your time. Businesses that rely entirely on the knowledge or memory of one person often struggle to grow without chaos.

If you plan to grow your business and employ staff, thinking about the people and culture you want to create early on is important.

You may want to consider:

• What kind of people do you want to work with?
• What standards in the workplace are non‑negotiable to you?
• How will feedback and mistakes be handled?

This helps you avoid making quick hiring decisions that may not work for the long-term good of your business.

Even simple businesses benefit from identifying a small number of meaningful metrics, such as:

• Customer acquisition cost.
• Customer retention or repeat purchase.
• Average revenue per customer.
• Time spent delivering vs selling.

While tracking everything is unnecessary, tracking nothing can be dangerous. A few key metrics can help you to understand what is driving progress in your business and where effort may be being wasted.

Establishing a business is about more than getting started; it is about creating something that can be sustained and help you to reach your goals. Decisions made in the first year can often determine how hard growth will be in years two and three. A business designed with growth in mind is far more likely to survive long enough to achieve it.

As experienced business advisers, we understand the many challenges and opportunities that come with starting and growing a new business.

Call us on 01384 376 964 to find out more…

Folkes Worton LLP Chartered Accountants
Accounting for the Future