Most start-ups fail in their first year. You need to have a strategic plan to succeed. You need to know your products and prepare a great marketing strategy and business structure for your start-up.
Here are some steps you should follow in developing your start-up.
1. Have A Company Account
You have to separate your business money from your own money to abide by the business law like levies and taxation. A sole proprietor might have the freedom to own a shared account for business and personal account. However, this is not recommended. A bank (Also see Introduction to Bank Reconciliation) that fulfills your requirements and an open credit line will be an added benefit.
2. Record Your Transactions
Your business’s structure determines how your accounting books process. If you are bad in bookkeeping (Also see What is Double-Entry Bookkeeping?), you could consider outsourcing to an accounting firm in Johor Bahru. By doing so, you could have more time on your core business.
3. Keep Track of Your Expense
Clear and excellent records of transactions would help you to make an analysis of the records and take corresponding actions. You could make use of these documents to claim tax returns. If you have traceable records, you could draw investors of financiers to invest in your business.
4. Do You Need to Pay Tax?
The type of start-up would decide which tax category you need to pay. Income tax would be submitted on your individual returns if you are a sole proprietor or operate a partnership business. Corporations have to pay tax separately from the business owners (Also see What Do You Need to Know About Ordinary and Necessary Business Expenses). If you operate a SST registered company, you will have to report and pay services tax.
5. Know Your Gross Margin
You could grow your company by keeping margins at a level where you provide your clients with the best price and receive enough returns at the same time.
The sustainability of your business depends on the price of the item and the expense of producing the item.
Gross margin is calculated as:
Gross Margin % = Gross Profit/ Revenue
Finally, check out the Accounting for Start-up – Part 2 for the next 4 steps.