Don’t forget the finances

Don’t forget the finances

Most people aren’t aware that when I started my business last year I did so without any start-up capital at all.  I already had the software and office supplies I needed so it was a case of doing the best I could on a budget of nothing, as I was already on a reduced salary from my employer.

So what lessons have I learned that will benefit others from this?

I have always been known for shopping around for a bargain, particularly since I first got access to the internet, and setting up my business was no different.

I hadn’t heard of a Virtual Assistant until this year, I just knew that I wanted to do what I do well, and ideally based from home. It was during a lot of internet research that I came across the term, and also a variety of sites wanting to support me as a Virtual Assistant, but all at a price!!

If I had signed up with all these sites and training courses I would have ended up bankrupt! 

Instead, I spent time really researching what I wanted to do, found forums that were full of people already doing it, and listened to what they had to say.  The majority of listing sites I came across were all American based, which really wasn’t any good for me. 

In terms of software again I searched the internet, listened to what people were using, and utilised the knowledge I already had.

Whilst I would love to upgrade various bits of my office equipment I am realistic, it’s more of a want than a need right now, and I am choosing to wait till I can afford it.

So what did I invest my hard earned cash in? Not a lot really. I ordered a small amount of business cards from Vista Print, but paid for the upgrades so that they didn’t look like Vista Print cards.  Again, a small print run for your first batch is a good idea as you will probably decide to change something before they have even arrived.  I changed both my trading name and logo quite early on.

I felt that one of my main priorities was a website, as I am marketing to a virtual market, this would be my main point of contact.  Again, I couldn’t afford to go for the bells and whistles CRM site that I wanted, but I have a monthly rental website instead.  When my business grows my website will evolve with me.

I decided that I didn’t need an additional BT line, I wanted the flexibility that a VOIP phone number would allow me, and the cost for this was minimal.

I shopped around for a business account that offered free banking and internet access.  To me, it is important to keep my business and personal transactions separate.

I listed my business on free listing websites; again I researched this before choosing them.

I created my own letter head in Word; I don’t need to have reams of printed paper lying around. I do however print on to a good heavyweight paper, if I have to print, as most of my documents are issued in pdf format and emailed.

I attended several free Business Link and HMRC workshops covering everything from cash flow, marketing, business planning, VAT, and self-assessment.

Quite early on I created a cash flow and an invoice timetable to ensure that the business was a viable proposition, this became critical when deciding to take it full time back in September.  I input my invoice projections into the cash flow, then allowed for all the business expenses that I could think of, as well as budgeting for the amount of money I need to put away each month for the tax man.  When all these had been taken into account the figure that was left would hopefully cover my drawings and leave some money in the business moving forward to cover the costs of replacing office furniture and equipment.

The beauty of a cash flow is that it adapts as your circumstances change.  As new clients come on board the figures in the income section are adapted, and as new expenses are incurred so are the expenses.

I tried to incorporate four weeks paid leave into the cash flow, just in case of illness or holiday.  Holiday I hear you laugh, you’re self-employed you don’t get holiday, but as the mother of a small child I do have to allow some time off for out of school care.  This was great until I fell ill too early into the cash flow!  Luckily, I had built up enough of a reserve to cover the few days I hadn’t been earning.  More importantly I had also built into my personal expenditure for income insurance, something I think many small business owners over look.  Also in my personal expenditure were the National Insurance contributions I need to make.

As the business has progressed so have the expenses, I now have online accounting from Xero, file back up and synchronisation from Sugar Sync, an inclusive call package on my VOIP phone, and utilise my own call answering service for when I am out of the office with Clients. But they have all come on board slowly and when I could afford them.

I also regularly review my cash flow and invoice targets to ensure that I am still on track.  It is vital that you keep reviewing this, how else will you know if it is working.

My next task is to write my business plan and targets for next year.  My goals need to push me, yet be achievable.  Without the constant desire to improve and move forward your business will remain static. Hark at me, self-employed for less than a year here and talking about businesses moving forward.

So what goals have you set yourself for next year and how do you propose to monitor them? I would be really interested to hear.

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