Contact Us Today! (972) 712-1515

"The Blog"

Managing the Money Aspect of Your New Business

Posted by Darryl V. Pratt | Sep 28, 2018 | 0 Comments

Coming up with a great idea that can be turned into a prosperous business venture takes a certain talent. Knowing how to get your great idea financed and properly managed, takes another. However, it may be easier than you think.

What You Need, What You've Got, and Where to Get the Rest

If you think you're in over your head when it comes to the financial aspects of your business, you're probably not. Really. In fact, all you need to do is sit down with an experienced business lawyer and determine what money you need, what you've got, and where to get the rest. According to the U.S. Small Business Administration (SBA), the following are some of the financial areas in which to focus when financing your new business:

● Estimating Startup Costs. While the most important startup cost will likely be “seed” money (the funds necessary to bring your idea to life), others include:

○ ongoing costs – such as insurance, inventory, and utilities;

○ one-time costs – such as incorporation fees;

○  essential costs – such as fixed expenses (rent, utilities, administrative, etc.) and variable expenses (inventory, shipping, packaging, commissions, etc.); and

○ optional costs – such as advertising, signage, or grand opening activities.

● Using Personal Finances. While many people finance some percentage of their venture using their personal finances, it's important to avoid putting yourself in financial danger. Take a good look at your personal income, expenses, credit score, and adversity to risk.

● Financial Analysis and Statements. Developing a cash flow analysis (which determines the amount of cash you need to start, operate, and expand your business) and breakeven analysis (which determines when your business will break even and begin to make a profit) are important steps in the financial part of the process. 

An equally important part of the process is having financial statements prepared, which are needed when seeking funding from investors or financiers, for ongoing management of the business, and for tax purposes. If you're not an accountant, hiring an experienced professional to assist you with this step is probably a necessary evil. A good accountant or business lawyer can help ensure that you are starting your business off on the right financial foot.

● Borrowing Money for Your Business. Once you know what you'll need to borrow, you can narrow your search to find the best lender based on your individual and business needs. The SBA offers financial assistance, as do banks, venture capitalists, and many others. Although there are a plethora of options available, never assume you've identified all potential sources of funding until you've consulted with an experienced professional.

Starting a business can be a complex process – especially when it comes to finances. Give us a call today. We can share our experience with you to unravel the mysteries of financial statements and help get you going in the right direction to build a financially healthy business.

About the Author

Darryl V. Pratt

With almost twenty-five (25) of experience as a dual-licensed Attorney and Certified Public Accountant, Darryl V. Pratt has practiced law in all areas of corporate and business law, non-profit law, estate planning, probate, guardianship, asset protection planning, bankruptcy (Chapters 7, 13 and 11), real estate, and taxation.


There are no comments for this post. Be the first and Add your Comment below.

Leave a Comment

DISCLAIMER Pratt Law Group, PLLC (PLG) has prepared the material on this web site, for informational purposes only; it does not constitute legal advice. Further, the material on this site does not create, and receipt does not constitute an attorney-client relationship. The information here is not intended to substitute for obtaining legal advice from an attorney. No person should act or rely on any information in this site without seeking the advice of an attorney. Members of the law firm of PLG are licensed to practice in various courts and jurisdictions; attorneys are specifically licensed to practice in state courts that are enumerated on their individual attorney profiles. We also have affiliations in particular cases with attorneys licensed in additional states. PLG does not offer any guarantee of case results. Although we are extremely proud of our excellent track record, past success does not guarantee success in any new or future case or client matter. This web site is considered advertising by the State Bar of Texas under the applicable law and ethical rules. The determination of the need for legal services and the choice of a lawyer are extremely important decisions and should not be based solely upon advertisements or self-proclaimed expertise. Only those attorneys who state they are Board Certified in their profiles on this website are Board Certified. All other attorneys are not Board Certified. Darryl V. Pratt is the attorney responsible for this site. The principal office of PLG is 2591 Dallas Parkway, Suite 505, Frisco, Texas 75034. Please note that the transmission of an e-mail inquiry itself does not create an attorney-client relationship. PLG cannot serve as your counsel in any matter unless you and our firm expressly agree in writing that we serve as your attorney. You should also be aware that the Statute of Limitations (the deadline imposed by law within which you may bring a lawsuit) may have expired or may severely limit the time remaining for you to file any potential claims you may have. Time is of the essence. If you believe you have a possible legal case, it is important that you seek out legal advice as soon as possible.