All posts by Pradeep Dabas

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About Pradeep Dabas

Pradeep Dabas, ACCA, MIoD, MBA Pradeep Dabas is a Chartered Certified Accountant (ACCA), Member of the Institute of Directors (MIoD), and founder of Forti, a Dublin-based accountancy and advisory firm helping Irish entrepreneurs and SMEs with company formation, bookkeeping, and compliance. He is also the founder of Salt Marketing, a Dublin-based digital marketing agency. Holding an MBA in Marketing and an ACCA qualification — both achieved in Dublin — and with over 20 years of experience in finance and business, Pradeep brings a rare combination of financial rigour and commercial thinking to every client relationship. He is also the creator of The Mentor Academy, an online education platform specialising in finance courses designed to help entrepreneurs and professionals take control of their financial future. Forti is based in Sandyford, Dublin and works with businesses across Ireland.

How Long is Your Company a Startup

Company Registration

How long is Your
Company a Startup?

Starting a business is a bold step – so much upside potential, but so many hurdles in the way. For a limited time, this new venture is called a startup. The general perception of a startup is a business/company in its first stage of operations. This stage lasts between 3-5 years for most companies, but some may take longer. Interestingly some startups will abandon this stage in less than 12 months by experiencing rapid and high growth within that time.

When Can You Stop Calling Your Company a Startup?

The name startup carries an element of allure, excitement, and hope. It is why people might prefer holding on to the name for as long as possible. But how long is your company/business really a startup? We have compiled some achievement metrics to help you know when your company is no longer a startup.

The Product to Market Fit

Startups operate on the assumption that their products or services will appeal to many people. That appeal/attractiveness is proven when people buy your product, thereby validating your business model.

For example, in the case of an app, there are alpha and beta versions you can release to people to test out the market for the product while improving the product itself. But once your software makes it past this stage and people are actually buying it, you are on your way to getting out of the ‘startup’ category.

Scale

Every startup out there aims at achieving growth and scale. Once you achieve these two, you shouldn’t call yourself a startup anymore. Scale refers to increasing revenue at a faster rate than the costs incurred. We measure scale through factors like revenue, the number of employees, and the overall company’s valuation.

Profitability

Profit is another measure of whether it’s time to ditch the startup label. Profit can take some time, and some companies take longer to break even, let alone make profits. Profits are an indicator that a company will get you returns on your investment. When you start consistently turning profits after expenses, your company might no longer be a startup.

Standardization

When your company is outgrowing the startup phase, one thing you notice is the standardization of processes and operations. As a startup, there are a lot of informal channels of communication and sharing of roles.

When the company takes off, the different processes and channels become more standardized. For example, if one member handled both accounting and marketing, they might have to give up one role in the future as the business grows, thus clearly defining everyone’s roles.

Semantics

Even with all the above factors to consider, sometimes the choice to keep seeing your company as a startup comes down to you. Startups are associated with innovation, growth, and potential, and people often don’t want to let go of that by turning into the traditional established companies. Startups are exciting, and losing that title can take some of that energy and innovation out of them. Because of this, some companies will prefer retaining the label ‘startup’ for a few years, which is okay because the ‘startup’ mindset motivates people to give more to the company. That said, would you classify your company as a startup by the above metrics?

How to Improve the Odds of Success for Your Startup

Company Registration, Limited Companies, Sole Traders

How to Improve the Odds of
Success for Your Startup

About 90% of startups fail, and this is a figure that entrepreneurs should understand and accept. Failure is part of being an entrepreneur, and the trick is to learn from it and keep going without losing the enthusiasm or drive.

The fact that a large number of startups fail doesn’t mean you should not try. You might be part of the 10% who see their hard work and resilience rewarded. A lot of entrepreneurs fail the first time but then get it right later on, while others are lucky and get it right the first time.

Every business involves risk, and success can never be guaranteed; however, you can improve your odds of success. Here are some tips that can give your startup a better chance.

Solve a Problem

Most businesses are built around addressing a real-world issue. To do this, you need to identify a problem that people have and observe the current steps taken to manage it. If you can solve a problem better than the current solutions, you create ‘need’ from customers.

Furthermore, founding a startup around addressing a problem gives you a purpose you believe in, which is better than just blindly chasing the possibility of earning millions. So, identify a problem and try to solve it; don’t just chase ideas.

Honesty

Learn to be honest with yourself and your colleagues and encourage honesty among your team. Brainstorm every negative scenario you might encounter when making plans. The possibility of failure should not scare you but encourage you to improve.

Be Bold

Go out there and interview potential customers about the problem you want to solve. You don’t have to tell them everything about your plans but acquire some information about the issue you intend to address. For example, inquire how important the challenge you want to solve is and how much they would pay to have it solved.

Analyze and Understand Your Target Market

After specifying and understanding the problem, assess your target market.
  • Who is your competition?
  • How large is the target market, and can it sustain growth?
  • What are the barriers to entering the market?
  • What is the trajectory of the market? Is it shrinking or growing?
  • What are the current trends in the market?
Your analysis of the above can help you become better prepared and ready to adapt, which will benefit your startup.

Establish a Good team

You need a reliable team to create a successful business. Of course, some people have succeeded by founding companies solo, but it takes longer and requires much more input. Your team needs to be as committed as you are and share your vision and goals. They also need to be consistent such that you can rely on them in any situation.

Step by Step Scaling

Many businesses rush their scaling, and it often becomes their downfall. There is excitement behind growing and expanding any business, but smart entrepreneurs learn to control the growth and only scale when they are ready.

Businesses that scale prematurely run the risk of burning out and sometimes even running out of resources. Scaling is a major decision that requires a founder to properly validate the market and find sufficient data to support an expansion. Don’t fall for any pressure to scale early; work at your own pace.

Final Thoughts

Failure is a subjective concept and applies differently to different individuals. Many successful entrepreneurs learned from their failures and ultimately discovered their success. So, hang in there even when the odds are against you, and with the right decisions, you can make your dreams of success a reality.

The Requirements for Starting a Limited Company in Ireland

Company Registration

The Requirements for Starting a
Limited Company in Ireland

Setting up a company is a bold step for one or a group of entrepreneurs. It is an overwhelming and exciting experience but remember, any mistakes at this stage can be costly. Because of this, we have outlined the steps involved and the requirements for starting your limited company.

Appoint the Company Director(s)

Any start-up requires at least one director. The role of the director is to manage the company and handle the day-to-day affairs of the company on behalf of the shareholders. In many startups, the role of director is held by founders/shareholders but as the company grows, the roles can be changed.

For a company in Ireland, the director(s) needs to be EAA residents. If they are not, you will require non-EAA resident bonds. If you choose to have multiple directors, only one is required to live in an EAA country.

Appoint a Company Secretary

After selecting a director, the next post to be filled is the company secretary. Their responsibility will be to file annual returns. Company secretaries have to collaborate with the company’s accountant to ensure your company’s financial records are properly managed and the returns are file returns on time.

Directors can hold the company secretary role but only if the company has multiple directors. You also have the option to outsource company secretary services to professionals such as at Pro Company Formation. A professional company secretary will ensure you remain in compliance by filing accurate returns on time. They will also reduce your workload giving you time to focus on growing your company.

Shareholders

A startup company needs shareholders and for most startups, the directors are usually the shareholders. Being a shareholder means you own a piece of or the whole company. They are there to provide financial backing and reap the rewards of the company’s success through dividends.

Decide on the Number of shares to release

Normally, a startup company is authorized to have up to about 10 million shares of common stock. The number might change as your company grows.

Shares represent the chunks of the company you’re willing to sell. Dividing and releasing shares is a major decision that needs the approval of the directors/shareholders and it involves a significant amount of paperwork. So, you might want to seek professional assistance to get it right.

Name the Company

Deciding on a name might seem like one of the first decisions to make when launching a startup but it’s not. It is more complicated than it seems because you need to find a name that the CRO (Company registration office) will accept.

First, your proposed company name should be different from the name of every other company in the country and fall within CRO guidelines. If the CRO detects a conflict in a name for example with another registered business, they will send back your submission.

To prevent this, perform a name check via the CRO’s company search facility. The name check is free and protects your company from infringement claims.

Prepare the Required Documents and Sign them

After completing the above steps, the next step is registering your company. There are two ways to register your startup;

You can do it yourself via the Companies Online Registration Environment website, or outsource the formation process to experts at Procompany formation to ensure smooth sailing.

Why Outsourcing Accounting Services Is Better than Doing it Yourself old

Accounting

Why Outsourcing Accounting Services
Is Better than Doing it Yourself

Every business has to keep its accounts up to date and this responsibility falls to the accountant. Accounting records are essential in helping you know how your business is performing financially and identify areas you can improve. These accounting records are also used in filing tax returns to ensure compliance in your company. For most startups, entrepreneurs choose to do their own accounts instead of hiring an accountant which helps you save money early on. However, it is not a sustainable long-term strategy. As a business grows, doing your accounts becomes more of a liability to your business. Self-bookkeeping requires you to have some accounting experience and most small business owners only have the basics and lack the specialized knowledge to do their own accounting. However, current trends have made self-bookkeeping easier through the rise of online accounting software. Now, people with minimal accounting skills can do their accounts.

Why doing your own accounts can be Costly

While doing your accounts is commendable early on, it is a responsibility that keeps growing as your business grows. As time goes on you will realize that some tasks will become too complicated for you and this is when to seek the required assistance. If you lack the appropriate skills in bookkeeping, you are likely to make mistakes. Mistakes in bookkeeping can be very costly to a business financially. For example, you can make an error and reach inaccurate figures in terms of total revenue and expenses which will affect your total taxable income. Thus, your business may end up either paying excess in taxes or less than required. When you pay less than your true tax liability, you may run into trouble with the revenue office and they can hit your business with fines and penalties. In extreme cases, they might even decide to audit your accounts to see if the mistakes were deliberate. Continuous errors in filing returns give them grounds to seize your accounts and even revoke your operating license. All this can be avoided by hiring a professional accounting firm as soon as your business can afford it.

The Benefits of Hiring an Accounting Service

Gives you more time to focus on other areas of the business

A growing business means more responsibilities and accounting can consume a lot of your time if you decide to do it yourself. It might become difficult to focus on other business operations and this can affect growth. Since accounting responsibilities can’t be rushed, you will spend a lot of time ensuring your records are accurate.

Helps you Avoid fines

A professional accounting firm can guarantee accurate records for every quarter, so you won’t have to worry about compliance.

Prevents you from Overpaying in taxes

Lack of mistakes means your firm will pay exactly what is required of them in taxes. While there might be procedures for acquiring tax rebates, you would have to identify the mistake which can be difficult if you don’t have a professional accountant. Some businesses end up paying excess taxes for years only to discover it when they hire an accounting firm.

Ensures you receive your tax relief

Annual changes in the budget affect the taxation regulations and sometimes business owners are granted tax reliefs and tax credits. Professional accountants will always pay attention to these and will inform you of tax benefits your business is eligible for.

Final Thoughts

Accounting is an essential part of any business. Your records can help you determine how well your company is doing and whether your business model is sustainable. It is okay to do your accounting as a start-up but once the company takes off, consider investing in an online accounting firm like pro-company formation. The benefits will always outweigh the costs and you will have more free time to focus on what you love.