Starting up: doing the basics right and setting foundations

The reality of starting a business 

Starting a business is exciting, but it can also feel overwhelming. Most founders begin with a clear idea, lots of motivation and a strong focus on making sales or winning clients. Often the financial side comes later, not because it’s not important but because it's unfamiliar. Over the years, we have worked with many start-ups and seen brilliant businesses struggle, the ideas were great but the financial foundations were not clear from day one. 

Getting the basics right 

When starting up it isn’t about complexity but having a basic understanding of the foundations of your finances. In simple terms it means having visibility over your numbers and enough understanding to make decisions. 

Knowing what money is coming in and going out, being paid promptly and paying the right people the right amount at the right time are fundamental. When these basics are in place they will support the business. 

Five financial foundations every start-up needs

1. Separate your business and personal finances 

Mixing business and personal spending can quickly lead to confusion, making it harder to understand how the business is performing and creating extra work later on. An easy way to keep your expenses separate is by opening a dedicated business bank account and/or taking out a new credit card, as well as using software to track everything. This will allow you to track income and monitor costs leading to more confident decisions.

2. Choosing software 

Having the right software in place from the start is important because it provides financial clarity, automates time-consuming tasks and again helps to build financial foundations. Finance software is vital for your tracking, business analysis and compliance and they are getting easier and easier to use. Having a system in place will not only make your life easier, it means when the time comes to hire a finance team, the transition will be smoother. There are lots of good options out there but if you are unsure about which software will be the best fit with your business, have a chat with the team at SJC 

3. Keeping an eye on cash flow

When starting up, cash flow matters more than profit. Knowing when money is coming in and when it isn’t can make a difference between growth and stress. Having clear invoicing and payment processes in place, regardless of the size of the business, reduces uncertainty. 

4. Understand your regular outgoings

It is important as a start-up to have an idea of how much the business costs to run each month. Subscriptions, software, suppliers and other regular expenses can add up faster than expected. Visibility over these costs helps prevent surprises and allows you to plan more effectively. You can track these with your software as long as you are disciplined about recording all your costs.

5. Stay on top of financial obligations 

As the business grows, so do its responsibilities. This might include VAT if you are registered, payroll, CIS or self-assessment, depending on your set-up. Filing and payment deadlines exist whether you’re ready or not and missing them can cause unnecessary stress. Staying organised from the outset makes these obligations far more manageable and helps avoid last-minute pressure. If you are unsure of your company’s obligations, speak to someone at SJC.

Where SJC fits in

At the start, many business owners handle their finances themselves and that can work well for a while. Over time, day-to-day finance tasks often take up more time. This is where SJC typically comes in, we work as an extension of your team. Supporting day-to-day financial processes and providing a dedicated point of contact as your business evolves. Our expert team focuses on the finances so you can focus on strategy and customers. 

Looking to the next stage 

Starting up is only the first phase of a business journey. With strong financial foundations in place, businesses can be better prepared for the challenges and opportunities that come with growth. Getting the basics right early doesn’t slow you down, it makes growth possible. 

If you feel that you need support, please book your free financial health check today. 

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