Organizing the finances when starting a business is a challenge for many start-ups. Raising capital is certainly a central component of finances – a good mix between equity and debt is important. Once the capital is secured, it is then a matter of finding the right business account.
Everything to do with finance
Establishing a company presents many challenges. The topic of finance is particularly important for start-ups but it is also often a complicated matter.
The starting point for the topic of finance when setting up your company is the financial plan in which you have determined the total capital requirement
Raising capital: Money to start your business
Depending on your business idea and the planned implementation, as a start-up, you have determined a capital requirement. You now have to cover this capital requirement – for which you have various options. Basically, you can differentiate between equity and debt.
Equity refers to money that the company owns. It does not have to be repaid and there is no interest. For that, you have to be ready when you find an additional equity investor to give up part of the company. In contrast, there is borrowed capital, which usually bears interest and has to be paid back.
In addition to equity and debt capital, when setting up a company, you should also check whether you are entitled to funding – it is important to adhere to the formal criteria. Cash.com can be an option if you need funding.
Select business account
At the same time as raising capital and, if necessary, related to it, you should think about another finance issue: the business account.
With a business account, you need to find the right house bank for you. Depending on how international your house bank should be, how many booking documents you need per month or whether an overdraft facility should be available: Choosing the right house bank is an important part of finances.
Pre- and post-company accounting
Bookkeeping begins before the company is founded because certain costs that arise before the company is founded can be claimed after the company is founded.
After the company has been set up, the company size and legal form are particularly relevant for the respective bookkeeping.
Taxes: uncomfortable, but important!
Probably the most unpleasant but also an important topic of taxes follows as the last chapter on finances. Some taxes are not payable until you make a profit. Other taxes, such as sales tax, are relevant at the start of the company.