New Start Up

Hi

I have recently been offered a franchise by a company I used to work for I have received proposed contract and est running costs and to be honest im not an expert on these so im wondering who or where is the best to go to for advice on these accountant? solicitor? both.
I have a great knowledge of the business itself but what to ensure I cover all the hidden costs also before making an informed decision.
I have had a failed business before mainly due to lack of knowledge on the actual on the financial side of things so don't want to make the same mistake twice.

Any advice greatly appreciated.

I don't think any solicitor could help you with this, and not many accountants are really in this business.

You might look for a part time Financial Controller, but to be honest the time it would take for such a person to get to grips with your business would probably make that an expensive option.

Enterprise Ireland or the County Enterprise Board might cover this cost for you under their mentor scheme.

However if as you say you "have a great knowledge of the business itself" then you should be able to do this yourself better than anyone.

First decide on a business cycle, is this a monthly business or a weekly or what ever. Some business have a clear natural cycle, say if you are paying staff weekly, then thats a weekly business. Lets say its weekly

Then make a list of all the cost items, including any necessary wages for yourself (keep items to be purchased for resale separate) then estimate how much each item will cost on a weekly basis. If the bills come in monthly or even annually break that down to a weekly figure. If you cannot do this yourself then you do not really understand the business as well as you think.

This will give you an idea of how much it will cost to run the business from week to week.

Now look at the gross margin. If you are buying goods for resale how much gross profit do you have, on each euro sold. If you are supplying a service yourself the gross margin may be 100%.

The gross margin multiplied by the turnover gives your net income. This should be at least equal and preferably higher than the costs. If it isn't you are not in business.

What will my turnover be is a difficult question, again an outsider is unlikely to know better than you do. However if it is a service business and you discover that you will have to work 100 hours a week to generate the turnover well that is something learned.

Good luck