These items are in addition to your general profitability and cash flow budgets – while they impact on these budgets, the below items are generally one off, but can play an important part in the ongoing success of your business.
Firstly, you should always consider any lag in time before earning (and receiving) income – this lag time will depend on the type of business you are operating, but it can be significant! The reason this lag time needs to be determined is that while you are waiting for the cash to come in…there will usually be expenses that need to be paid.
The other two items I want to mention are accounting and legal – every new business owner should seek accounting and legal advice before entering into an arrangement!
I’m sure you can all appreciate that seeking legal advice is of utmost importance and can save a lot of headaches down the track…
And in defence of my own occupation – most new (and second and third time around) business owners need to seek advice on the appropriate structure for their business and the taxation implications. Included in this initial advice might also be assistance in setting up and training in accounting systems to enable a smooth operation in this area…all of this will be of help when it’s time to complete your Business Activity Statement (BAS) and year end financial statements and tax return.
So if you are considering entering the business world, make sure you allow for these items when you are preparing your start up budget, getting good quality advice from the start is paramount – of course if you need help, you know who to Contact!