Bay Area residents, lucky enough to own a home, understand the importance of setting priorities. Sure, there are some new developments and high-rises in San Francisco, but many locals live in older places that need some TLC.
That great deal in the Richardson District has a teeny-tiny bathroom requiring a full remodel. And the kitchen could use a glow-up too. Investing in upgrades is a goal for a homeowner, but where do they begin? Although it’s fun to have new marble countertops, what about the plumbing below? When ready to invest for the future, the things you don’t see are the things to pay attention to first. And they are usually the ‘unsexy’ stuff, like the electrical and the foundation itself.
It’s the same for business owners. Who doesn’t want to invest in a building with a hip vibe and fun amenities? Or indulge their marketing team in a big budget to offer cool events and hand out trendy swag to prospective customers? It’s fun and exciting, right? Especially if you’re the leader of a start-up business ready to disrupt the marketplace.
But hold on there, if past downturns in the business climate have taught us anything, it’s that nothing beats a solid financial foundation. We can look back at past “hot new Bay Area businesses’ and remember all the baubles and flash didn’t keep them from closing up shop. In comparison, other small businesses who survived those downturns are thriving today. The big difference between these two examples is how business leaders invested and managed tax preparation.
Tax preparation is a foundational practice
Venture Capitalists are less interested in ‘trendy’ business pitches these days, but they are still willing to support a smart idea. The one thing that will get their attention is how the entrepreneur approaches their financials. It’s been called ‘capital-efficient fundamentals,’ meaning, is there a solid foundational financial structure plan? Are they ready to pivot in the marketplace and invest when needed? Bonfire posted the top VC firms investing in San Francisco start-ups. It’s clear that more venture capitalists have gotten tougher about how their money will be spent! They expect to hear a startup focused on maintaining a solid financial foundation before spending on eye-catching extras. And they appreciate it when an entrepreneur partners with a San Francisco CPA firm to ensure the tax preparation is consistent.
Again, the things customers and others may not see are the things an entrepreneur should pay attention to first. The Harvard School of Business posted about the business fundamentals every industry professional should know. The first two are analytics and financial accounting! As a San Francisco CPA firm, we are ready to check those two off the list! We get our entrepreneurs set up for long-term tax preparation, tax analysis, and planning. These consistent practices provide the opportunity to reduce surprises and leverage cash flow for when it’s needed most. Being a level-headed entrepreneur focused on foundational practices may not seem exciting to others, but it is the right groundwork for long term success.
