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5G is the next evolution in mobile networks. It offers far more than mobile calling and faster internet browsing: it is set to stimulate the emergence of start-ups and small businesses, and open the door to new products and services.
A tech start-up? Your accountant should be your best friend
Entrepreneurs behind tech start-ups are savvy in more ways than just those that involve a great business idea. Increasingly, we are witnessing business owners adopt all roles within their business, including legal, company secretarial, bookkeeper, tax compliance and HR.
This approach can reap short-term rewards by virtue of protecting the start-up’s finances in the initial stages. In relation to, for example, the tax advantages that are available however, it’s easy to inadvertently breach the qualifying conditions or not adequately scrutinise whether the business is eligible for the relief, leading to costly mistakes at a later date or implications that impact the perception investors have of the business.
It’s for this reason that it can be better to befriend your advisers at the earliest opportunity.
The tech business model
For traditional businesses, the business model is structured around identifying the customer base for its products and identifying the sources of finance. Broadly speaking, tech businesses fall into one of two categories: they deliver technology-based products and services in a new way or create new innovative technology-based solutions.
While the traditional approach to developing a business model still holds as a foundation for tech businesses, the way many tech businesses make money does not follow the proven path of ‘sell goods or services to customer’. In the world of tech, there is no set way of doing things. In fact, digital disruption is the basis on which the global success stories have erupted. Business models in tech hinge on a different set of factors and so this means a different approach to accounting, advisory and tax is required.
The business processes that power the digital economy are very different to conventional businesses and so traditional approaches to accounting and finance are simply insufficient.
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This article is a summary of an article originally published by MHA MacIntyre Hudson and published with their approval.