Financial tips for startups: To be addressed as a ‘boss’ can be exciting.
Starting a business and watch the business grow/survive is the challenge most startups encounter.
In most scenarios, lack of funds is always responsible for businesses to fold up.
Quality financial management system and technical know-how of a business basically, are the very important factors to view keenly before starting a business.
Entrepreneurship is a special skill on its own. To be addressed as an entrepreneur, is expected that you must be a problem-solver.
Also, it is expected you’ve dully carried out adequate research on the business you plan to venture into.
For startups to start seeing constant flow of income and recording maximum profits, which is the major aim of establishing the business, you must have a work plan and be prepared for more innovative ideas.
Unfortunately, most entrepreneurs lack patience to stay put in business when the income isn’t flowing as anticipated in the set up stage.
Patience is vital in every business. Your ability to withstand and stay firm during these trying times is a way of gaining experience and improving in certain areas.
For you to stay in business, it requires resources.
As earlier pointed out, lack or insufficient funds makes many startups throw in the towel.
To avoid starting and backing out so soon, we’ve prepared some amazing practical financial lessons/tips to guild startups and entrepreneurs.
Financial tips for startups: 6 practical financial lessons for startups and entrepreneurs
- Set your financial goals
Since finance can be the deciding factor on whether you stay or quit the business, it is pertinent you have a solid plan before you start your business and always revisit it to keep you in track.
Your business financial strength is very vital and your ability to utilize what is have is more important.
You do not necessary need to be a great accountant for you to do this. Financial tips for startups. No doubt, having basic accounting skills would help you.
While setting your financial goals, you should have solutions/ answers to these questions.
- What is your monthly income expectation?
Every business owner/CEO, is cut out for success. Financial tips for startups. No matter how young the business is, having a target should be included in your planning stage.
You can set as daily income then multiply it by the number of days of the month. This should be your expecting figure or income.
Setting a ridiculous high target may cause you some heart break, it is important you set a feasible amount and work towards it.
- How do you intend to pay your staff?
Remember, you’re still new in the business. Offsetting bills is very challenging for so many business operators.
You should decide on time if you’re going to pay your staff on commission-based or place them on basic salary.
Having workers placed-on commission-based for a startup can help save cost and improve productivity.
As time goes on, you can now place them on full salary probably, things might have improved for the organization.
- Time management
‘Time they say is money’. You are now boss on your own doesn’t mean you should not stick to a time.
You should have a resumption time as well as a closing time.
Work as if you’re still an employee. Resume when you ought to have resumed.
Time management is key. Your absence can drive your clients to your competitors.
Aside that, first impression matters a lot. The impression you might have created would remain so.
- Have a separate account for your business
The essence of having a separate account set aside for the business is to enable you track your spendings.
The income generated from your business should be used to run the business.
And in a situation, you need funds, there can be alternative sources.
Just as you intend to pay back the loan you collected for your business, you should also do so to your personal account if you lif ted some funds from there.
You should try everything possible not to temper with your personal account.
Your personal account can be used to run other financial needs in exception to the business.
- Understand your cash flow
Having knowledge of how much flows in and out of the business is quite an impressive tips for startups.
You should keep track of every spendings.
Even if you do not have an accountant to oversee this function, you as the boss should be doing this regularly.
For instance, money spent on stationaries, and other day-day spendings should be recorded.
The calculations would enable you either improve on production as the case may be or it will warrant you cut down on your spendings.
Your cash flow is a way to know your strength or area of improvement towards reaching your financial goals
The better it is the brighter the future of remaining in business.
- Cut down on your budget
Startups are usually faced with lack of funds to effectively run the business.
It’s also challenging for startups to be assessable to bank loans.
It is therefore imperative to do or manage with the little resources you have.
Just as we pointed, you understanding your cash flow, you should be mindful of your spendings.
Your expenses is not meant to be above your expenditure/income.
If you find it pretty hard to pay salaries, you can downsize.
That’s the reason you must understand and know the financial strength of the organization before you come up with the decision to place your staff on salary.
In a situation where the business can only pay for five staff, then go ahead.
You can also check other things which no doubt are important but not really necessary for the organization.
For instance, you can cut down your budget on branding and advertisement.
Startups needs advertisement in promoting their brands, in cutting down your budget, you choose cheaper advert plans and means.
Most times, it is not the amount you spent on advertisement that increases productivity.
- Go for the best hands
It is better you have 2 qualified persons as a staff than having the office filled with inexperienced hands.
No sentiments attached to business. Financial tips for startups. As a startup, you need creative minds to push the organization forward.
You employ based on experience and capability of the individual.
You set target for everyone including yourself. This tip enhances productivity.