In the race to bring a great new idea to the local Hong Kong market, HK based small business owners may end up stumbling out of the gate before they have even had a chance to gain traction or see the lights of their target market. An experienced service provider can help entrepreneurs not only with company incorporation in Hong Kong, but avoid common pitfalls at different stages of the business. In the beginning, the provider can align the ducks in a single row for the entrepreneur team. By preparing cash flow budget, and selecting the right accounting software, it would have saved many HK company founders tons of time and resources. The founders may then allocate the precious time to building the business and developing the actual product.
As a one-stop shop for the Hong Kong entrepreneurs, the service provider may need to find ways to give the new startups operating funds, or introduce the angel investors who are able and willing to offer some startup funding schemes. A big mistake many small business owners make when growing their businesses is when they started for the first few months without sufficient funds coming in to subsidize for the daily business operations. It is believed more than 50% small businesses who were actively looking for investment or funding were rejected of such investment.
Founders very often do not have a good sense how much money their companies may worth, though they do know that the companies were undervalued. Having fast access to an objective and defensible valuation of their companies is a highly valued service. The worse is yet to come and we always should be fully prepared for the worst financial situation. There are different scenarios that would require a local Hong Kong business to determine its valuation, including bankruptcy and business disputes, financing, succession planning and business sales. It would include even mergers and acquisitions. By conducting a proper business valuation analysis, the service provider can ensure the entrepreneurs have a strong, documented opinion when such scenarios arise.
There can be a time in the future when the growing businesses eventually reach a point where they are in need of a chief financial officer (CFO). But the brutal truth is that many HK businesses cannot afford to pay all the expenses and salary compensation to a full time CFO. The service provider should provide the accounting and bookkeeping service where it can act as a CFO in part-time.
This type of one-stop shop service actually provides a growing business with a mature, seasoned financial professional at a much significantly reduced cost. In terms of quality, it may not be that much of a difference.