From Dwayne Wright - www.dwaynewright.com
This is part of my ongoing series or articles about setting up your own software publishing business (cause FileMaker is very good option for doing that). This was originally published by me in a guide called FileMaker Software Publishing back in 2002.
ABOUT THE MONEY
I don’t know much about starting a large company, so this is from the perspective that you want to startup your own small company first. Perhaps, with yourself as the lone employee.
Let’s begin by talking about startup capital. It is debatable whether not the money needed for funding business operations should be the last or the first thing you think about. Well, it probably shouldn’t be the last thing you begin thinking about but you do have to consider what you are going to do with the startup cash you get.. Again, if you are doing the moonlighting setup in the beginning, you probably won’t need to find investors for your enterprise.
In most cases thinking and planning about new startup revenues can be tricky. Unless you have intimate details about the profitability of your new venture, such as you just finished working for a similar company, you really won't have enough information to forecast profitability that far in advance. You also likely have to make a decision on what type of accounting practices you may use. You can build your own FileMaker accounting system, but don't expect for it to be something that most accountants, venture capitalists or in investors feel comfortable with. Also we mentioned it before, doing all the work yourself will take away from your design time. It is not hard to look up after 10 hours of work on a FileMaker based accounting solution and see that you just scratched the surface of creating something you can use.
When you are making up your first year income projections, I would break it into a few easy sections such as income, expenses and cash flow. Income can be the same as our revenue, which would generally come in the form of consulting on projects and the sale of FileMaker based solutions. Expenses will likely come from payroll, internet fees, computer equipment, computer software, professional fees and other related fees.
In the beginning, your cash flow documentation can usually be your checking account ledger. This can give you a decent idea of the ebb and flow of your cash balance at given times of a month or year. Cash flow usually doesn't get the respect it deserves, until it is too late. You may be doing great but if the money is not there when you need it ... it can cripple your new business.
If you don’t know beans about accounting, I’d suggest picking up the Accounting For Dummies book. It may help to introduce you to the concept of accounting well enough that you can then talk to an accountant. I would recommend an accountant for at least your annual tax related documentation. I tend to purchase a tax package every year and do my own tax return. Then I go to an accountant to do my taxes. This method allows me to be familiar with my tax situation going in and reduces the amount of time the accountant needs to do my taxes. After it is done, I always get some great tips on next years business.
More info about the author and FileMaker in general, contact me at firstname.lastname@example.org.
© 2007 - Dwayne Wright - dwaynewright.com
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