financial tips for startups

Entrepreneurs and start-up founders often struggle with dealing with finances. It’s a different set of skills than starting and running a business. Creating a company often requires you to think in broad and bold terms, while financial planning should be precise and detail-oriented.

This doesn’t mean that a business owner can’t handle the finances of their company on their own. It just takes a bit of commitment and a change of perspective in some cases. Even with that said, sometimes it might be useful for even a small business to have a professional financial advisor at hand.

Consider employee expense management in Singapore system to save money and invest in good areas.

Day to day expenses

It often happens that day to day expenses of running a business become more overwhelming than the initial investment needed to start it. That’s because they tend to multiply and are notoriously hard to calculate. This is something to consider before taking out a loan, in addition to figuring out ways of managing them more efficiently.

One of the things to do is to keep track of all expenses and make changes in your plans based on this data on regular bases. It’s relatively easy to do once you establish a system for it and it saves quite a lot of money in the long run.

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Create an emergency fund

As the old saying goes, you should fix the roof while the sun is shining. This is something that a lot of business owners forget once their company is starting to do well. They see that as an opportunity for growth and expansion, which is fine, but it’s also important to use the prosperous times to create an emergency fund.

Decide on the amount you plan to set aside every month and stick with it no matter what and regardless of how well you’re doing there’s going to be a time when you’re going to use that fund in one way or another.

A credit score

Keeping track of and attending to your credit score is one of the most important jobs a financial manager can have. The easiest part of this is making sure that all the bills are paid on time. It does sound simple, but that’s what most business owners struggle with.

However, there’s more to it. It’s often useful to improve your credit score by taking out small loans and paying them back in a timely fashion. This is an extra expense but it creates numerous additional opportunities for the company as well.

Diversifying your investments

As soon as a business has enough funds to invest, it should start wealth planning. A company needs to expand, and investing is a big part of that. However, it’s a much riskier endeavor than most traditional business owners are used to. That’s why it’s useful to diversify the investment early on and have more than one reliable source of income. You can use the services of professionals like Thane Stenner to help you with wealth planning and management.

A great way for a business to diversify its investments to trade in precious metals. These trades are far more secure than those dealing with stocks because the price of precious metals isn’t affected that harshly by the governmental actions or changes in the markets overall.

Forming partnerships

Business partnerships are the cornerstones of the corporate world. In order to make sure your business is financially stable you should try to enter into long-term partnerships with important clients as soon as you can. This is especially imperative for smaller businesses. By having someone who can order your products in advance, or pay for your services in the same manner you’re avoiding a lot of the risks that smaller businesses can’t handle.

Keep in mind that this often means tying the fate of your business to another which can be scary for a lot of people and for good reasons. This is something to consider before making a deal.

Consulting the experts

There are experts who should be on your payroll as soon as you’re able to afford them because their expert knowledge is worth the cost and can easily be translated into actual profit. The first expert to hire is a tax attorney either in an advisory or in a full-time capacity. A corporate lawyer should follow because when the business starts to expand there are much more rules to understand and keep track of.

Their services can sometimes be very expensive but they can also save you a lot of money by avoiding lawsuits and using the tax laws to your advantage.

Related Posts: 7 Ways you can finance your new startup

Saying no

The best advice about financial stability is also the hardest one to follow – you should always try to live below your means. That means that most the problems could be solved just by saying no. It seems easy -but try it for a while and you’ll see that it takes courage and character.

Business owners need to think about their finances in broad terms as well as in details. This mostly means that they should try to expand the company while keeping it steady and this is done by diversifying its reach and income sources.

So you’ve finally plucked up the courage to turn your dream of becoming the next Steve Jobs into reality. You’ve already ditched your job, chosen a perfect name and a logo for your startup, and even started building your website. In a month or two, the whole world will know about you.

What in the world can be simpler than that?

Unfortunately, even though this all plays out perfectly well in your head, setting up a business is not just about having brilliant ideas. Money makes the world go round, remember? To survive in the first year of your entrepreneurship, you need to build a solid financial plan that will help you boost your cash flow and manage your available resources wisely.

Here are a few financial tips that will help you do so.

Set Realistic Goals

The only way to succeed is to dream big, right? However, in this turbulent entrepreneurial world, this doesn’t have to be so. On the contrary, setting unrealistically high objectives may leave you holding a bag of worms. The key to success lies in scaling down your business ideas and setting achievable goals.

In the beginning, you should focus on staying on budget and keeping unnecessary expenses low. So, there is no need to go into the red by investing in a fancy office in the heart of the city or buying the state-of-the-art equipment. Instead, you should consider outsourcing your workflow. Namely, statistics show that remote working programs help businesses save on up to $11,000 a year, allowing you to allocate your budget to some more important aspects of your business, such as paying taxes, salaries, and health insurance.

Monitor Your Spending

Once you launch your startup, expenses will be coming at you from numerous directions. And, the only way to survive is to know where every single dollar is going or coming from. However, if you don’t have any experience in accounting, managing hundreds of bills, receipts, taxes, and invoices on a monthly basis on your own is not an option.

One of the most effective ways to stay on top of your finances is to invest in cloud-based accounting software, such as FreshBooks, Xero, QuickBooks, and Kashoo. These highly intuitive solutions will do all the hard work for you, allowing you to access, monitor, and manage your finances in real-time. Of course, as your business grows and your accounting becomes more complex, you should consider hiring a pro to handle the books for you.

Focus On Acquiring New Customers

Without customers, your business wouldn’t exist. To build an extensive customer base, you should promote your business through a wide range of acquisition channels. For starters, you could focus on building a digital marketing campaign, as one of the most affordable and effective ways to hook your customers’ attention. Launch a user-friendly site and optimize it for search engines, start your company’s blog, be active on social networks your customers use, invest in a solid email marketing campaign, and get featured on all major business directories. You could even turn to some effective guerrilla marketing techniques, such as street art, organizing stunts, or throwing flash mobs, and promote them via your social media profiles or website.

Once you attract new customers, you should go the extra mile in retaining them. Namely, reports show that 80% of your business’ revenue comes from 20% of your current customers. Ranging from providing loyalty programs to giving out promotional products, there are numerous ways to show your customers a little appreciation.

Keep Calm And Have A Backup Plan

Did you know that 82% of small businesses fail due to cash flow problems? This is exactly why you should have a backup plan when starting a business. Given the fact that it takes your business two years before it becomes self-sustainable, you should never get carried away and quit your job as your main source of income.

Also, the chances are that you will face numerous cash flow problems during this period and, to survive, you need to act fast. This is why you need to choose a funding option that will meet your needs and get you going no matter what. Always go with the financing solutions that will boost your liquidity immediately and yet won’t compromise your company’s future, such as applying for equity funding, selling invoices, taking out online loans, or crowdfunding.

Partner Up With Another Company In Your Industry

“Our success has really been based on partnerships from the very beginning,” Bill Gates claims. However, you don’t have to be one of the richest people in the world, owning a tech giant to harness the benefits of business partnerships. On the contrary, they may be necessary for your survival in such an overcrowded market.

Teaming up with another company in the same niche that has a similar corporate culture and mission statement gives you an opportunity to expand your customer base, generate more revenue streams, save money on shared expenses, and gain more experience in a given area.

Back To You

Even though launching your company may now seem like some sort of self-punishment to you, this shouldn’t discourage you. Against all the odds, with a strong financial plan, dedication, and patience, you will manage to launch your dream company and stay competitive.

About the author:

David Webb is a Sydney-based business consultant,online marketing analyst and a writer. With six years of experience and a degree in business management, he continuously informs the public about the latest trends in the industry. He is a regular author at BizzmarkBlog. You can reach him on Twitter or Facebook.

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7 Financial tips for entrepreneurs and start-up founders