5 reasons why you should check your financing

更新於 發佈於 閱讀時間約 13 分鐘

“Cash is king, queen and jack”, applies to poker game as well as start-ups. Most entrepreneurs are so focused on building their business idea that accounting has become their last priority. “By the time they approached it at year-end, it’s too late,” said Philip Wong, a management consultant and Head of CFO advisory services, FastLane Group. So what should entrepreneurs start doing now to ensure financial health? Philip shared his top five mistakes and actionable steps for entrepreneurs.


Mistake 1: Lack of a decent business plan and realistic financial goals to become self-sustainable
Startups are used to pitching to investors to secure funding but most haven’t thought about when and how to transition from investor capital to revenue to fund their business. A solid financing plan is critical to this.
Actions

  • Incorporate payback period and estimated ROI into your business plan, adjust your investment cost to be proportional to estimated revenue to avoid budget overruns.
  • When formulating the business model, entrepreneurs must never forget that the business is not just to generate sales but also to make a profit, hence operating costs need to be considered.


Mistake 2: Lack of understanding of your competitiveness to price your products and set payment terms accurately
“You need to know your market well to assess if you are truly a disruptor or just another player. This will affect your ability to command a higher price point, your negotiation power with suppliers, and whether you need to offer better payment terms to your customers as a selling point. This will all have an impact on your cash position,” noted Philip.
Actions

  • Understand the selling point of your solution — if your solution has a differentiated edge, you don’t necessarily need to price low to attract customers.
  • Develop different scenarios and estimate your financial impact, e.g. priced at industry average, or plus or minus 10% from the industry average.

Mistake 3: Not understanding your monthly burn rate and cash reserve, and impact on payment and credit terms
Some entrepreneurs don’t know their monthly burn rate and the minimum payment and credit terms they need, hence they are unable to negotiate for the right terms, causing capital to dry up very quickly. “An entrepreneur should know his monthly burn rate from the top of his head without asking his accountant. And a healthy startup should also have 3–4 months’ worth of operational cash flow as their cash reserve,” said Philip.
Actions

  • Calculate your monthly burn rate, and negotiate your credit and payment terms to achieve a cash reserve of 3- 4 months’ worth of operating cash flow.
  • Build management reports at least every quarterly to keep track of financial health to allow you to make changes in the next quarter in the same financial year.

Mistake 4: Leaving financing and accounting system to the end
Start-ups under-estimate the workload needed to set up accounting system, leaving it for tax filing at year-end, often causing tax and legal implications at personal as well as corporate level. Philip shared with us three examples from his experience:

  • Business spending are mixed with personal expenditure, hence difficult to be substantiated as those for business purpose and fail to benefit from tax deductions.
  • Naming the founder as founder, contracted consultant or employee of the start-up may have different implications to the start-up’s obligations (MPF payments), rates for personal tax and corporate tax. It’s best seeking professional advice early on about this.
  • Accounting errors only get discovered by accountants or auditors at year-end, by then adjustments in reporting may raise questions from investors.

Actions

  • Start building good practice early in the year, like bookkeeping.
  • If no expertise is available internally, use part-time accountants or outsourcing providers to build up basic accounting functions.




Mistake 5: Raise fixed costs too easily especially headcount, leading to an exponential increase of burn rate
For start-ups who are still in their growing phase, replicating the organization structure of large corporations may not be useful, especially in terms of headcount. “Start-ups don’t realise that adding headcount results in a disproportionate increase in their cashflow requirements, such as salaries, larger office space, MPF, laptops, and other office supplies.” The solution? Build a small team with people who can wear multiple hats, and consider using part-time and outsourced supporting functions before hiring full-time employees.

Actions

  • Hire colleagues with expertise core to your business and supplementary business skills e.g. HR and IT systems to build a strong team under budget.

So a clear message to all entrepreneurs — start reviewing your financing health today and don’t wait till year end!

Philip Wong, Partner and Head of CFO advisory of FastLane Group gives us the best advices to ensure financial health for the company

留言
avatar-img
留言分享你的想法!
avatar-img
FastLane Group的沙龍
2會員
115內容數
2020/12/10
https://fastlanepro.hk/xero-set-up-guide/ SMEs require cloud solutions that are simple to manage, yet complete in their functionality. Although there
Thumbnail
2020/12/10
https://fastlanepro.hk/xero-set-up-guide/ SMEs require cloud solutions that are simple to manage, yet complete in their functionality. Although there
Thumbnail
2020/08/10
It all started when Alex and Wilson met at the University of Technology in Sydney. Both were young, hungry, and in pursuit of a global experience that
2020/08/10
It all started when Alex and Wilson met at the University of Technology in Sydney. Both were young, hungry, and in pursuit of a global experience that
2020/08/10
Looking for company formation in Hong Kong and wondering what do you need to know? When an individual decides to start a business, there are many ques
2020/08/10
Looking for company formation in Hong Kong and wondering what do you need to know? When an individual decides to start a business, there are many ques
看更多
你可能也想看
Thumbnail
孩子寫功課時瞇眼?小心近視!這款喜光全光譜TIONE⁺光健康智慧檯燈,獲眼科院長推薦,網路好評不斷!全光譜LED、180cm大照明範圍、5段亮度及色溫調整、350度萬向旋轉,讓孩子學習更舒適、保護眼睛!
Thumbnail
孩子寫功課時瞇眼?小心近視!這款喜光全光譜TIONE⁺光健康智慧檯燈,獲眼科院長推薦,網路好評不斷!全光譜LED、180cm大照明範圍、5段亮度及色溫調整、350度萬向旋轉,讓孩子學習更舒適、保護眼睛!
Thumbnail
創作者營運專員/經理(Operations Specialist/Manager)將負責對平台成長及收入至關重要的 Partnership 夥伴創作者開發及營運。你將發揮對知識與內容變現、影響力變現的精準判斷力,找到你心中的潛力新星或有聲量的中大型創作者加入 vocus。
Thumbnail
創作者營運專員/經理(Operations Specialist/Manager)將負責對平台成長及收入至關重要的 Partnership 夥伴創作者開發及營運。你將發揮對知識與內容變現、影響力變現的精準判斷力,找到你心中的潛力新星或有聲量的中大型創作者加入 vocus。
Thumbnail
全民創業時代到來,但創業不是一股衝動,而是需要透過評估、規劃、執行....
Thumbnail
全民創業時代到來,但創業不是一股衝動,而是需要透過評估、規劃、執行....
Thumbnail
財務規劃 沒錯,文創品牌的財務規劃是最重要的一件事,因為要做的事情太多,每一件事情都牽涉到錢財的支出,沒有了完整的財務規劃,這個品牌一定是一敗塗地,沒有成功的可能,因為財務健康直接關係到品牌的長期持續發展。那財務規劃到底要規劃哪些事情呢?這裡就一一說分明。 跟錢有關 注意,下面要講的所有事情,
Thumbnail
財務規劃 沒錯,文創品牌的財務規劃是最重要的一件事,因為要做的事情太多,每一件事情都牽涉到錢財的支出,沒有了完整的財務規劃,這個品牌一定是一敗塗地,沒有成功的可能,因為財務健康直接關係到品牌的長期持續發展。那財務規劃到底要規劃哪些事情呢?這裡就一一說分明。 跟錢有關 注意,下面要講的所有事情,
Thumbnail
中小企業主、自由工作者、欲建立品牌、工作室(副業轉主業),會碰到的一些共通財務問題: 財起初的財務管理還算井然有序,但一旦事業規模擴大,往往陷入混亂。 不知道該不該花錢請人、下廣告、買設備等等.. 財務不獨立,品牌永遠都沒戲
Thumbnail
中小企業主、自由工作者、欲建立品牌、工作室(副業轉主業),會碰到的一些共通財務問題: 財起初的財務管理還算井然有序,但一旦事業規模擴大,往往陷入混亂。 不知道該不該花錢請人、下廣告、買設備等等.. 財務不獨立,品牌永遠都沒戲
Thumbnail
現金流如同一間公司的血液,若沒有足夠的資金,「一文錢難倒英雄漢」!如何有效控管企業的現金流,提供新創、中小企業實務上的思考方向,手把手帶你建立企業現金流量表!
Thumbnail
現金流如同一間公司的血液,若沒有足夠的資金,「一文錢難倒英雄漢」!如何有效控管企業的現金流,提供新創、中小企業實務上的思考方向,手把手帶你建立企業現金流量表!
Thumbnail
中小企業申請融資時 應注意事項彙整 7/7參加融資媒合會台北場,我觀察到的心得,跟大家分享。 今日會議,主要就是協助想要融資的企業 可順利的募集到資金,協助新創企業更加茁壯,今天總共八家企業,企業規模從年營收千萬到上億的都有。 我觀察下列幾點及銀行主管跟信保基金主管們給的建議,提供給想要融資企業參考
Thumbnail
中小企業申請融資時 應注意事項彙整 7/7參加融資媒合會台北場,我觀察到的心得,跟大家分享。 今日會議,主要就是協助想要融資的企業 可順利的募集到資金,協助新創企業更加茁壯,今天總共八家企業,企業規模從年營收千萬到上億的都有。 我觀察下列幾點及銀行主管跟信保基金主管們給的建議,提供給想要融資企業參考
Thumbnail
一個完整的品牌財務規劃管理,必須要有三項表格,損益表、資產負債表、現金流量表,如果不是專業領域出身,不會編制,起碼要能看懂內容,才能掌握品牌在財務上的狀況,而編制的部分交由專業人員執行。 由於現金流量表是呈現公司實際帳戶中流出與流入的金額,因此非常難造假,可以避開損益表美化的問題。
Thumbnail
一個完整的品牌財務規劃管理,必須要有三項表格,損益表、資產負債表、現金流量表,如果不是專業領域出身,不會編制,起碼要能看懂內容,才能掌握品牌在財務上的狀況,而編制的部分交由專業人員執行。 由於現金流量表是呈現公司實際帳戶中流出與流入的金額,因此非常難造假,可以避開損益表美化的問題。
Thumbnail
為何我們要做財務規劃?因為我們生活離不開錢,所以需要好好管理錢的流向。更重要的是,做財務規劃能讓我們「省時」。你一定很好奇為何能「省時」,對吧? 
Thumbnail
為何我們要做財務規劃?因為我們生活離不開錢,所以需要好好管理錢的流向。更重要的是,做財務規劃能讓我們「省時」。你一定很好奇為何能「省時」,對吧? 
Thumbnail
一個完整的品牌財務規劃管理,必須要有三項表格,損益表、資產負債表、現金流量表,如果不是專業領域出身,不會編制,起碼要能看懂內容,才能掌握品牌在財務上的狀況,而編制的部分交由專業人員執行。 品牌成立初期,必須先將資金分配的比例規劃好,大致上分為幾個重點,產品庫存成本、固定資產支出、人事薪資、店租薪資、
Thumbnail
一個完整的品牌財務規劃管理,必須要有三項表格,損益表、資產負債表、現金流量表,如果不是專業領域出身,不會編制,起碼要能看懂內容,才能掌握品牌在財務上的狀況,而編制的部分交由專業人員執行。 品牌成立初期,必須先將資金分配的比例規劃好,大致上分為幾個重點,產品庫存成本、固定資產支出、人事薪資、店租薪資、
Thumbnail
要在任何事業上有所成就,你必須對數字有感覺、對數字間的關係有感覺,並能從其間的關聯,了解到哪個數字特別重要,必須加以監控。用手記錄,是我所知道學習數字最好的方式。你必須一開始就收集這些資訊,尤其是記錄你的毛利率,並計分百分比。你要找出那些在問題還不嚴重之前就發出警訊的數字,好讓你及時做出正確的決策。
Thumbnail
要在任何事業上有所成就,你必須對數字有感覺、對數字間的關係有感覺,並能從其間的關聯,了解到哪個數字特別重要,必須加以監控。用手記錄,是我所知道學習數字最好的方式。你必須一開始就收集這些資訊,尤其是記錄你的毛利率,並計分百分比。你要找出那些在問題還不嚴重之前就發出警訊的數字,好讓你及時做出正確的決策。
Thumbnail
在新創公司的營運過程中,財務會計領域如發票、營業稅、報表等等繁雜事項,對於大多身兼數職的新創老闆,可能是一件很麻煩的事情;但若未將這些大大小小的事項處理好,公司的營運可能會因此埋下問題的種子。
Thumbnail
在新創公司的營運過程中,財務會計領域如發票、營業稅、報表等等繁雜事項,對於大多身兼數職的新創老闆,可能是一件很麻煩的事情;但若未將這些大大小小的事項處理好,公司的營運可能會因此埋下問題的種子。
追蹤感興趣的內容從 Google News 追蹤更多 vocus 的最新精選內容追蹤 Google News