Starting up a business is hard work. Statistically, around 20% of start-up businesses fail in their first year, while two thirds will fail within 10 years. The exact reasons why a start-up business fails can vary, but according to Investopedia, two of the top four most common causes of failure are all related to financial troubles. Either the business poorly manages its money, or fails to adequately plan its finances to prepare for trouble. Partnering with an accountant can help you avoid both of these pitfalls.
3 Reasons to Partner With An Accountant
1. Division of Labor
One of the modern innovations that allow businesses to achieve success previously unattainable is division of labor. Nobody can be good at everything, but without division of labor, a business owner has to try. He has to be good at marketing, production, sales, and finances. That’s a lot of fields to be an expert in. Fortunately, you don’t have to do it all yourself. If you’re starting a business, you obviously already have a product or service you want to sell. That’s good.
Now, you can split your time up between that and managing the money and marketing the product. To do that, however, you have to first spend a lot of time learning how to do all of that. That doesn’t make you money, it just makes sure you can keep making money. You don’t have to do that, though! By partnering with an accountant, someone very specifically trained to handle finances, you hand off financial management to a specialist and let yourself focus on doing what you do best. That is to say, you can spend more time making money.
2. Avoid Tax Problems
The tax laws are a labyrinthine nightmare of tangled legal codes. It can be a mess to navigate, but if you know the system, there are lots of ways you can help your business get ahead. The problem is, the laws are constantly changing, so you have to keep up to date. So, if you do it yourself, you not only have to learn how to be good at managing money, you have to learn and keep relearning the tax codes. That’s, if you’ll excuse the pun, really taxing on your time and energy.
Then there’s the possibility of fines! Not only does messing up your taxes mean you lose tax breaks, but you can get hit with penalties for filing incorrectly, filing late, or any number of other mistakes. Managing finances adds so many new issues to deal with. Partnering with an accountant means you have someone whose sole job it is to keep up to date on tax codes and help you navigate the mess. Once again, this saves you both time and money and helps you avoid mistakes.
3. Plan Ahead
The third most common cause of start-up businesses failing is a lack of financial planning. They just start selling stuff and then get so focused on the moment – making sure you have the money to cover your expenses now! – that they never plan for the future. Two things happen with this approach. The first is that not planning for the future means that when something bad happens, you aren’t prepared for it. The second is that when an opportunity to make more money comes, you miss it because you weren’t prepared to take advantage of it.
Accountants help you avoid these pitfalls. While you focus on making money, your accountant is busy managing the money so you know exactly how much you’re making and how much you have. They can give you advice on the best ways to save and spend the money to maximize your returns. That way, when opportunities come, you have a little money to spend expanding your business to take advantage of them. When something goes wrong, you have some spare cash on hand to cover the losses.
A Start-Up Business Needs An Accountant
The biggest mistake a start-up business can make is trying to do everything in-house. You think you can save money by not hiring an accountant and just manage the money yourself. While you might save a little money not paying someone, you spend a lot more time not doing things that make you money. The early days of your business are when it’s most important to get ahead. At the start, when you’re still trying to get your name out, you’re at constant risk of not having the money to cover yourself. You need to focus on making as much money as you can if you want to avoid collapsing when you hit the inevitable bumps in the road. An accountant is a very minor expense compared to how much it helps you out.
Let Us Help You Out
Whether it’s giving you more time to focus on making money, helping you avoid the pitfalls of tax errors, or helping you plan for the future, your start-up business needs an accountant. That’s what we’re here for. Here at Stapley Accounting, we have the training and experience to help you with all your financial needs. Keeping your business alive is already a hard job, don’t make it harder on yourself by trying to do everything yourself. Get in touch with us today and see how we can help you get ahead!