As an accountant, you will be aware that you are not always viewed as an essential asset when it comes to helping a business out in its early days. Although we can all appreciate that we are the unsung heroes behind any and all small-to-medium sized start-ups!
Whilst many of today’s young entrepreneurs may view us as not being an integral part of their young businesses, our services are vital. In fact, our services help new start-ups grow and develop, enabling them to mature into fully fledged companies by helping them avoid obvious problems early-on.
Although we are aware of this, not all young entrepreneurs are, and this is just how it goes, unfortunately. But, thankfully, a large number of these young entrepreneurs are aware of the important role we play and rely on us to help them form their companies and assist them in the early day-to-day management.
If you are working with a client who is just about to form a company, there are a few things which you need to be aware of and which you will need to also make your client aware of. We have gone through these methodically, so that you do not miss any of the important points.
Starting the Actual Company
What is unique about accountants is that we are fully ready and able to help new start-ups form into fully-fledged companies, registered and officiated by Companies House. Your client will likely rely on you to do this alone because, let’s admit it, it is a largely uninteresting undertaking which many clients want no part of. Whilst some of us register companies regularly, other do not.
To register a company, it must be incorporated online at Companies House. All that needs to be done in the registration process is provide some basic information – your client can give you this – and get a few signatures – again, your client can provide you with these – and you are good to go.
After the initial registration, you will need to return and complete: a memorandum of association (detailing the company’s name, registered office and nature of business); the articles of association (the governing rules and regulations of running the company); and the completed IN01 form off to Companies House. Many companies opt to just use the default memorandum and articles of association, so there are plenty of these available in the public domain. Discuss this with your client first, however, as they may have different ideas.
Managing the Start-Up
Start-ups are not easy to run at all. It is very likely that your client will be dead on their feet. Despite this, it is very important to maintain regular contact with your client and keep up to speed with the day-to-day goings on of the start-up.
In the very early days of working with your client, these will be the busiest; your client will be struggling to keep on top of the workload if they are the sole person behind the operation. During this time, you have to work cohesively with your client to make sure they are keeping on top of everything. As an accountant, you have lots of relevant expertise you can use to help your client during this stage. Ensure that all the start-ups books and financial accounts are being kept up to date, that your client is constantly aware of the start-ups cash flow, available finances and always ensure that there is cash available for making investments or repayments.
Slowing Things Down
It is highly likely that your client will be very eager to go forward, full steam ahead and start eyeing up possibilities for expansion. Whilst this is admirable, expansion costs money: where is this money going to come from, though?
It is rare for start-ups to bring in serious amounts of money from day one, so you – as the industry expert – will need to ensure your client is aware that it is not always commercially viable to try and expand from day one. Expansion is a slow process which requires a lot of money, and you should try and slow your eager client down to prevent the start-up going under.
Although your client is in charge of the start-up company, your influence and expertise will be relied on heavily and your client should be happy to take on board what you are saying; you have a great deal of influence and should use it to best benefit the company.
When it comes to it, as an accountant, you can help your client raise funds to invest in growth. Although crowdfunding and angel investments are always nice, these don’t always happen. The next best way to secure funds for expansion – when the time is right – is through securing overdrafts or taking out loans from banks.
What if My Client Does Not Listen?
Things don’t always go according to plan and clients are not always easy to work with. Unfortunately, you will not always have a client who is willing to listen to what you have to say.
It is important to be firm but fair. After all, you are a seasoned expert and whilst your client may be running the company on paper, you have a lot of knowledge to give. Don’t be afraid to say things as they are and give your client a dose of the truth. After all, you are paid to help your client run their business successfully, not run it into the ground.
If your client is being reckless or ignorant, just be honest and upfront. It is better to tell your client what will happen if they refuse to take your advice, as opposed to letting your client find out what will happen for themselves.