There has never been a better time to start your own business. Let me explain why…
By Michael J. Walls
Lately, I have focused on how cloud technology can transform an existing business, but what if you want to start your own business? How can cloud technology help a start-up? The good news is that there has never been a better time to start your own business.
As a Chartered Accountant, you only have to take look at various job sites where numerous ‘finance transformation’ roles are listed. This is a clear indication that businesses recognise the need to embrace new technology, including cloud technology and robotic process automation (RPA), if they want to maintain their competitive advantage into the future.
For a budding entrepreneur setting up their own business, embracing cloud technology from the outset can give their start-up a competitive advantage over existing businesses yet to embark on a digital transformation project.
Technology has tipped the scales
The introduction of cloud-based technology has drastically changed the way businesses operate. Starting a new business no longer requires a significant investment in IT infrastructure such as on-site servers and telephony. Nowadays, all that is required is a laptop or mobile device, and a good internet connection.
Cloud-based technology enables businesses to access the following benefits, which will give them an edge over existing competitors:
- Flexible working: employees with a mobile device and an internet connection can work anywhere. This widens the talent pool when recruiting employees or hiring freelancers;
- Collaborative: cloud-based tools enable teams to work on the same document in real-time from anywhere in the world, negating the need for multiple document versions and making the process more efficient;
- Business continuity: operating in the cloud means that business data is not stored on-site or on devices. If your premises or laptop are destroyed, all you need to do is pick up another laptop, log on, and continue to operate your business;
- Scalable: in the past, start-ups would have been at a disadvantage against larger companies with on-site IT capacity. Now, start-ups are on a level playing field without the need to invest heavily in physical IT infrastructure; and
- Future-proofed: with the growth of emerging technologies (such as the Internet of Things), the amount of data businesses collect and process will increase exponentially. This will require big data analytics to provide vital information on driving business development and growth. Cloud computing will make it easy to deploy the necessary applications to process big data.
Cash is king, but data is queen
As Chartered Accountants, we are all familiar with the phrase that ‘cash is king’. While I agree with this sentiment, in a digital age, I would add that accurate and timely data is queen when it comes to creating realistic cash flow forecasts for your business and making decisions.
Businesses have traditionally used spreadsheets to manage their cash flow forecast, which can take a lot of time and effort to update and maintain, and may not be accurate or realistic. Operating in the cloud enables businesses to utilise open APIs (application programming interface) on cloud-based accounting systems to integrate bank feeds and other third-party applications.
Business owners can easily integrate a cloud-based cash flow forecasting solution with their accounting system. This will ensure that the information used to create the cash flow will always be up-to-date and reliable. Some of the solutions I have used also include the following features:
- Dashboards: at a glance, business owners have the most pertinent information in relation to their cash flow. Data can include current and future available cash balance; upcoming receipts and payments; forecast for the next 12 weeks; or any bank reconciling items;
- Forecasting: this is made simple as the solution analyses the data in the accounting system to create a forecast, which can be easily adjusted; and
- Scenarios: various ‘what if’ scenarios can easily be created and layered over the main forecast to help with future planning (for example, an increase or decrease in sales receipts).
Start-ups that embrace cloud-based technology from the outset are more agile. This, coupled with having up-to-date information on your start-up’s performance, means that when you are ready to seek investment, you will be able to respond to due diligence queries more efficiently.
This will give investors more confidence in how your business is operated and will help them make an investment decision much faster.
If you are setting up your own business, you should adopt a digital-first approach to gain a competitive advantage on existing businesses that have not yet made the move to the cloud. This will also ensure that your start-up is built for scale and future-proofed vis-à-vis emerging technologies.
You’ve got an idea, developed your business plan and are ready to incorporate your company. What advice would I have appreciated when I reached this stage?
1. Choose the name
The Companies Registration Office (CRO) is strict about your company’s name. If it is too similar to an existing entity, the CRO may reject your application to incorporate. My advice is to check the CRO register as soon as possible and reserve the company name if it is crucial for your business.
2. Secure the domain
Once your business name has been decided, assuming there are no issues with the CRO, you should purchase the domain name. There are various sites, such as godaddy.com or 101domain.com, where you can search for and purchase your company’s domain. You will note that a lot of the dot-com domain names have already been purchased by individuals seeking to make a significant return. Businesses are getting around this by using ‘wearecompany.com’ or ‘thisiscompany.com’.
3. Banking can take time
Setting up traditional banking arrangements can take two to three weeks, as there are various anti-money laundering (AML) and know your customer (KYC) procedures to complete. You should have a contingency plan for taking customer payments.
4. Digital banking
There are many online banking and payment solutions that are a lot more efficient to set up. For example, I was able to set up Revolut Business Banking for Dappr within 24 hours, which included the AML and KYC checks.
5. Don’t forget tax
You will also need to register your company for tax. Form TR2 is relatively straightforward to complete. However, the email address to submit the form was deactivated and I had to post the completed form to Revenue.
Michael J. Walls ACA is the Founder and CEO of Dappr.
This article was originally published in the August 2019 issue of Accountancy Ireland.