Launching a startup business is better said than done. Daydreaming of a sugar candy may require real sweat and blood to see the daylight. Every step here must be taken cautiously. Most entrepreneurs fail because often they run out of cash very soon. So, financial management is a must for any startup.
Here are a few tips on managing the finance of your business: –
- Focus on marketing & sales: You must give the topmost priority to marketing. Planning a robust strategy from the very launch is highly helpful. All channels of business cannot be explored simultaneously. So, concentrating on those most promising is helpful at the beginning. Later on, as your business expands and moves towards more stability, exploring other avenues of marketing can be considered.
- Limit fixed overheads at the start :Budgeting is the key to survival and success when a financial crunch comes. You must concentrate on keeping overheads low and invest more in generating direct profit-making. So no fancy offices or expensive cars.
- Monitoring income and expenditure: As an entrepreneur, you must always minutely monitor your income and expenditure. To avoid too much expenditure hiring an expert is not a very good idea at this stage. Instead, using financial software for bookkeeping is a better option. Keeping your books of accounts up to date are a must.
- Entrepreneur’s salary – it’s a must: While a business grows, being an entrepreneur, you must also sustain yourself. So, you must always keep aside an amount to sustain yourself. It may not be a hefty amount to lead a luxurious life, but it should be enough to keep the pot boiling.
- Managing cash flow: A startup business is always short of funds and therefore managing the cash flow is the key to success. You must keep a track of all your business money, from where it is coming, and to where it is going. One must always establish a budget and stick to it.
- Small goals and short leaps are better than big jumps: While you may dream of going very big, the practical approach is always to concentrate on small targets. Maybe weekly or daily targets of achievement, which will help your business,grow slowly but steadily.
- Time management: Time management is another essential key to success for an entrepreneur. As the wise say – “Time is Money.” time spent on anything else other than concentrating on the business itself is wastage. So, from the very beginning, you must make sure you keep a watch on your daily routine so as to not spend time on other things besides business, especially at the initial stage.
- Hope for the best, but be prepared for the worst: While dreaming, you must always keep yourself prepared to face any adverse situation when they are least expected. If you are in a regular job, it is never advisable to leave the job unless your income from the business becomes stable enough to replace your salary. You should also plan your retirement and insure enough to keep yourself immune from any untoward situation. Therefore, a systematic investment must be planned along with solid insurance to cover any unforeseen expenditure.