At Kashoo, we understand that every small business owner cares deeply about staying ahead of the curve and making well-informed business decisions. That’s why we recently sat down with our very own Controller and CPA, Siena, to talk about the Business Life Cycle, what it means from an accounting perspective, how it relates to the small business owner, and how Kashoo can help with your Business Life Cycle and steer you in the right direction at each phase.
The Business Life Cycle is the progression of a business as it evolves from "inception" right through to either "final closure" or "rebirth." This progression typically consists of four stages which every small, medium, and large-size business hopes to experience in one form or another.
In Part One of this series, we’ll go over the first two stages of the Business Life Cycle and highlight the most relevant tools within Kashoo that can help small business owners reach their business goals.
Business Life Cycle Stage 1: The Startup Stage
The Startup Stage, also known as the "Opportunistic Stage", begins the moment you have worked out a business plan and organized enough resources to sell a product and/or service.
You might be in your first month of operations, or have spent a few years acquiring clients and marketing your business.
No matter where you fit in, this is the high-risk period of the Business Life Cycle that many businesses fail to outgrow, often due to poor decision-making or limited resources.
It’s no secret that finances and cash flow must be front and centre in every major decision you make at this stage. This is where Kashoo comes in.
How Kashoo Helps with the Startup Stage
With Kashoo’s cloud-based accounting software, you’re able to make those critical decisions by keeping track of all your businesses income, expenses, and sales taxes.
First and foremost, the ability to enter unlimited transactions is an awesome feature to take advantage of. This means you don't ever have to worry about having incomplete records or paying more money to access the software because you entered 101 transactions. It’s also worth noting that you can upload unlimited file attachments on each transaction.
Secondly, bank feed functionality offers a quick and simple method of importing bank/credit card transactions. This results in seamless account reconciliations that inform you where every dollar is going.
Kashoo can also help your small business market itself with personally-branded invoices. This is one of the best ways to present your business to clients in a professional manner, and provide a high level of service with minimal effort. You can either choose from one of our default templates, or fully customize your own invoices by using CSS/HTML variables.
As is often the case, you might need some funding for your immediate costs to ensure that your operations stay afloat. This is why Kashoo gives you the option of applying for a line of credit through a service called Fundbox.
In a recent study, Fundbox found out that 64% of small businesses are affected by late payments, and reported a staggering 48% of net 30, and 45% of net 60 invoices are paid late.
Fundbox offers business owners a simple way to fix their cash flow problems by advancing payments for their outstanding invoices. They can then use that unlocked cash to pay contractors, vendors, and service providers.
Another area where Kashoo can really help you succeed in the Startup Stage is with tracking unpaid invoices and unpaid bills. Our detailed reports enable you to quickly see which clients still owe you money, how much you owe to your suppliers and manage your payments so that you can plan ahead.
Lastly, by setting up your sales taxes in Kashoo, government tax remittances become a simple and painless experience. Multiple tax rates, single tax rates, or a combination of tax rates can all be handled within Kashoo.
Business Life Cycle Stage 2: The Growth Stage
The Growth Stage, also known as the "Refining Stage" of the Business Life Cycle, occurs when you begin to break-even and generate steady profits. Your business will experience an increasing flow of income that encourages more activity and output.
This is a fantastic period to find yourself in, and you’ll certainly require more tools to manage your financial operations.
Additionally, you will likely find yourself needing to add more capital to keep up with demands. That could mean both monetary capital and/or human capital.
How Kashoo Helps with the Growth Stage
The great news here is that Kashoo integrates with dedicated payroll providers in both the USA and Canada. These providers take care of all your payroll payments, remittances, and other employee benefit obligations you may incur. And if those aren't a fit, you can still calculate your payroll using a tax table or a payroll service, and enter your payroll numbers into Kashoo by entering an expense or an adjustment.
As your business grows and operations become more refined, so should your revenue follow suit. Now you can not only send invoices in Kashoo, but also get paid faster by accepting online payments via credit card. By making it easier to accept payments from your clients you can greatly improve your cash flow. Kashoo has partnered with Square, BluePay, and Stripe to make this possible.
This brings us to another great point, the Growth Stage of the life cycle is the best time to think about widening your safety net by securing a line of credit. Whether you utilize Fundbox or secure other sources of credit, this type of safety net allows you to run your business at full force and not worry about failing to fulfill your contracts.
For those who enjoy working on the go, our award-winning iOS app caters to all your mobile accounting needs. The app works offline, so you can still record invoices anywhere, and capture receipts and send invoices directly from any iPhone or iPad. In addition, reports can easily be generated or printed for anyone you wish to share with.
The app also includes a dashboard visual of your current finances and past trends. So you can forecast ahead by having insight into your monthly and annual income, expenses, accounts receivable, accounts payable and more.
Stay tuned for Part 2 of our Business Life Cycle series where we discuss stages three and four of the Business Life Cycle; the Maturity Stage and the Exit/Rebirth Stage.