Mahi Sall, Advisor, Fintech-Bank Partnerships, Payments and Financial Inclusivity
January 25th, 2023
Mahi Sall is the CEO & Founder of FinXpair, a Berlin-based strategic advisory boutique firm focu[...]
5 Financial And Tech Considerations For A New Business
April 13, 2023
Image: Adobe Stock
Starting a new business can be both exciting and stressful. With your new venture, you can begin to showcase your products or services and earn a living, but you also need to learn how the business world works to ensure it grows with time. In any case, you need to know more about the different business structures and determine which one fits you well. Also, it would help to plan as much as possible before starting your own business. It includes conducting market research, finding funding options, and setting your marketing strategy.
Indeed, running a business takes a lot off your plate. There will be many things to consider. However, the most important considerations will be in the financial and technological aspects.
That said, here are some financial and technological considerations that new businesses ought to make.
Tech Considerations
1. Vendors and Service Providers
Your company is likely to use a variety of technologies to streamline operations. You can collaborate with various vendors and service providers to carry out your operations. However, it is essential to note that service providers differ. So, you must select one that meets your requirements and fits your company well.
Considering any service provider's experience and industry expertise is also critical. The greater the experience, the better. For example, if you are looking for a company that manufactures medical equipment, you can hire RBC Medical for device manufacturing or find comparable alternatives in your area.
2. Cybersecurity
Given the increasing frequency of cyberattacks, business owners must implement cybersecurity strategies to protect their data. Although you can set up cyber defences for your business on your own, it is best to hire experts to assist you in establishing strong defences.
Experts can also assist you by providing cybersecurity awareness training to your employees. However, keep in mind that there are numerous other aspects of cybersecurity that you may overlook if you do it alone. That is why hiring a service provider like KDIT services consultants to create a cybersecurity strategy for you is prudent.
3. Password Management
You will almost certainly use software and products that require password authentication. Passwords are an excellent way to increase the security of your systems. Employees will almost certainly need passwords to access various parts of your systems. However, it is important to note that weak passwords can pose a security risk.
Employees often set weak passwords out of fear of forgetting them. That, however, is not a good idea. If your passwords are too weak, hackers can get past your defences. As a result, it is critical to invest in a password manager to help keep your organization's passwords secure.
A password manager enables you to create strong passwords that hackers will find difficult to crack. Plus, they can allow you to reset passwords regularly. It would be best to urge your employees to use password managers for enhanced security. There are many options available. Choose one that works for you and fits your budget.
4. Document Management
Your company is likely to handle a large number of documents. It includes invoices, receipts, purchase orders, proof of payments, legal service agreements, employee files, and other documentation. These documents must be properly stored following applicable compliance regulations.
You should look into ways to streamline document management through digital solutions such as cloud storage. Cloud storage is fantastic because abundant cloud storage is available, depending on the solution you select. You can access the documents anytime, and your team members can do the same.
Another document management solution is using online or e-signatures. E-signatures are becoming ever more popular because modern systems have been digitalized. There's no longer a need for you to sign documents physically. You can now sign and send documents digitally using several e-signature tools online. These make document signing much easier and faster.
5. Internet Speed And Reliability
Fast internet is critical for business operations to run smoothly. Most businesses run their operations using connected devices and software. They can't afford slow internet speeds because it will affect more than employee productivity. But it can also affect the user experience (UX) if your company has online services. As a result, you must select a reputable service provider with fast internet speeds.
Financial Considerations
Image: Adobe Stock
1. Funding
When starting a business, it's critical to consider how you'll fund your venture. Personal savings, small business loans, venture capital, and grants are all options for startups seeking funding. You need to identify and utilize the methods that are available to you.
2. Tax
Taxation is an unavoidable part of running a business. If you're starting your own business, you should be aware of the tax laws and regulations that apply to you. Tax laws and regulations may differ between countries, regions, and states.
It is best not to approach taxation blindly or with assumptions, as you may be fined for failing to comply with tax laws. As a result, it's best to consult with a tax expert in your area about how you should account for and file taxes. Remember that you don't have to be a tax expert. Instead, hire someone who is.
3. Overhead Costs
Running a business will undoubtedly incur overhead costs. Rent, rates, wages, manufacturing overheads, commissions, and tax are just a few of the fixed or variable expenses to consider. Whatever your cost structure is, you must keep expenses as low as possible.
You should spend money on things critical to your company's survival and growth. Then cut back on unnecessary expenditures that don't contribute to the bottom line.
It can be challenging to classify expenses. However, you should use your company's goals and objectives as a guide. You could also speak with your financial advisor.
4. Business Credit
Before you start a business, you should consider how to build good credit. Credit ratings are a critical component of business financial management. The reason for this is that if and when you apply for business loans, you will need to have excellent credit. Good credit demonstrates to lenders that you are creditworthy and capable of repaying loans. Even if you never use a business line of credit, it is critical to develop credit management systems. You never know when you might need to use a credit line.
5. Cash Reserves
Any business must have healthy cash flows to thrive. However, you must also have cash reserves in case of a rainy day. The business world is very unpredictable. You never know when a major client will back out of a transaction or when the economy will collapse. Keeping cash on hand in an emergency is always a good idea. It could help keep your company afloat. That is why, before launching your business, you should consider creating a savings plan.
Conclusion
Starting a business is not easy. Because there are often numerous factors to consider, it is natural for anyone to find this process daunting. The best thing you can do in this position is to educate yourself on how your industry works. Understanding this can give you confidence.
See: ARK Innovation Predictions and Big Ideas 2023
However, knowing your business's financial and technological aspects is also critical. How you handle these issues will significantly impact whether your venture is profitable in the long run. So, before you start your business, consider the above financial and technological considerations.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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