6 Top Financial Tips for Your Startup Business
Growing a start-up business is not for the faint of heart. It can take significant time and resources and be a stressful process. No matter how much planning and preparing you do before you take the leap. That is why we took time to put together these Financial Tips for Your Startup.
Statistics show that start-up businesses are a costly endeavor. From start-up costs to overhead to simply figuring out all the details in the beginning, it could take a significant length of time before you start turning a noteworthy profit.
Luckily for you, you don’t have to figure it out on your own. Many have gone before you and no doubt many will also come after you. While some may not always find success, you can certainly learn from those who have and also take heed of the mistakes that some have made and learn from those as well.
That’s not to say that every business startup circumstance will be exactly the same. The fact of the matter is, it won’t. But the tips can be a lesson across the board, providing you with valuable steps you should take and valuable things you should proactively avoid.
This guide is not meant to be your one-stop shop for a successful business. There is not a guide out there that can promise you long-lasting financial success. But what we can do is give you functional advice that you can put into practice as you continue on your entrepreneur journey.
We present to you our top 6 financial tips for your startup business.
1. Don’t Over Extend Your Budget
Successfully operating a startup business is an expensive endeavor. One of the most common reasons
that startup businesses fail is because they don’t understand the costs and they run out of money.
Make a financial plan. The plan needs to be realistic and you need to fully understand every single dollar that comes in and every single dollar that goes out. Yes, there may be unexpected circumstances that arise but don’t spend money you can’t afford. Your budget could be the saving grace of your startup business financials.
We all know that costs vary and that expenses will occur but if you want to see your startup business be successful, you simply have to take responsibility and track everything. Make a budget and stick to that budget. Do not pass go, do not stray from your budget and definitely don’t spend where you don’t have to.
Find ways to cut costs where you can and keep your initial costs as low as possible while you get established. Cash flow will take time to establish and you have to make ends meet in the meantime without running your resources dry.
2. Hold Back on Credit
There are financing options for startup businesses but be careful and do your research. You don’t want to dig your startup business into enormous debt that your cash flow might not be able to handle. However, at the same time, some businesses are inevitably going to require additional fund options.
You can look into various business credit cards. Many of these offer cashback and rewards but some suck you in and then charge exorbitant interest rates and fees. Read all of the fine print, including promotional rates that don’t last.
Another financing option is a business line of credit or even a business startup loan. Again, do your research and plan accordingly. You will have to make your payments even when cash isn’t flowing like you want it to. Plan your budget accordingly.
3. Seek Out Resources
There are a number of resources available for businesses of any kind. Some of these resources are a costly investment that may need to wait until you are financially established and some of them are simply invaluable and might just be the key to your success.
Let the experts in the field guide you but as you do so remember your bottom line and your budget. Don’t spend more money than you should just because a program promises success. It never hurts to look into options.
Whether you start with some self-help books on startup business financials or you connect closely with individuals who mentor startup businesses or you find the value in seeking out a consultation program with extensive information and resources, you can learn from those in the know.
A successful business requires someone who is willing to listen and learn. These outside resources may have insight that you never considered and they may just see the big picture that you aren’t noticing.
It’s better to have an open mind to suggestions and recommendations than to learn the hard way that you may not have been fully prepared for what it takes to start a business.
Your drive and your passion will only take you so far. if you’re willing to learn from the resources available and heed the advice of those who know and understand what it takes to be a successful entrepreneur.
4. Focus on the Building Blocks
For your startup business to be successful, you must build.
- You will need clientele and paying customers.
- Forecast-able cash flow all day long – but in the end, the cash flow comes from those who pay for what your startup business offers.
- Success will come from establishing a customer base and then growing your customer base. Treat your customers with care and they will bring more customers in to you.
It will be essential to market your business and to do so in an affordable manner. When you’re creating that business plan and sorting out your budget be sure to keep this at the forefront of your thoughts.
Find ways to draw in customers and consider the best ways to execute a plan to acquire customers. Look at all of your options and alternatives and determine the optimal way to build your customer base within the means of your budget.
Chances are you won’t be able to spring for a television commercial right away. You will need to turn to local means and good old fashioned flyers and posters might just be the best startup marketing for you. Research your options and maximize your efforts to build the customer base.
After all, it will ultimately be the customers that will keep your business running through the years.
5. Separate Business and Personal
There is a fine line between business finances and personal finances. In the end, you need a clear line between these areas and you need to establish a safeguard to avoid crossing this line.
After the initial startup process and the establishment of a budget, you should not rely on your personal finances to make the business startup financials successful.
The hard fact of the matter is that if your business doesn’t make it, you don’t want to have exhausted your personal funds and put yourself into a position you can’t dig out of. Keep your personal and business financials separate as a means of protection.
While we’re on the topic, you should be certain to pay yourself from your business financials. However you determine to pay yourself, just make it consistent and maybe even draw up a contract or document that specifies how you pay yourself. You never know when that could come in handy. On the other hand, be sure you are being reasonable. Remember you need your business to survive and be profitable.
6. Expect the Unexpected
Despite the best-laid plans, chances are you will experience something that is wholly unexpected. And more likely than not, that experience will cost money. So rather than sit back and wait for that to happen and then scramble to find a resource, plan for it.
Establish an emergency fund as early in your business startup as you possibly can. We understand the budget is tight to begin with but it is essential to prepare for unexpected circumstances that will blindside you, probably at the most inconvenient time.
You can save yourself a tremendous amount of worry and stress if you simply expect the unexpected and tuck away an emergency fund for when such a time occurs.
Conclusion of the Financial Tips for Your Startup
We said it before but we want you to understand, business startup is challenging. It can take a lot from you and there is never a guarantee that you will be successful. The best you can do is to prepare for the good, the bad, and the ugly. Simply take the steps to set yourself up for success financially.
Can we guarantee that these tips will keep your business in the black? No, we sure can’t.
We can assure you that these tips could go a long way towards financial success. They might just be the source to keep your startup business afloat.
