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.
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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.
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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.
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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.
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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.