Bill Reichert the Managing Director at Garage Technology Ventures as well as a Venture Capitalist says:
If you’re an entrepreneur, you’ve got to be more than just a visionary. You’ve got to be more than just a product guy. You’ve got to be a business person. And being a business person means that you pay attention to finance. That’s what’s going to make the difference to your investors and ultimately change your life for the better. You need to understand the underlying financial flows of your business. That’s key to your understanding of how to manage your business.
But do you?
You might say ‘As a new business owner, you are faced with huge decisions on a daily basis. Who should you hire? What should your logo look like? Where and how should you incorporate your brand?’
These are Important, who says they aren’t?
But what to do with your startup money? How you manage your initial funds is also critical, especially because mostly many entrepreneurs use their life’s savings to make the leap into the independence of designing their future.
So when it comes to your Startup finances like Bill Reichert said ‘You need to understand the underlying financial flows of your business & that’s how you crack the key to understanding of how to manage your business.’
So today what we’re going to do is give you the tools of startup finance to help you manage and build your company.
Keep it Simple
We all agree simplicity is the ultimate sophistication!
Same way when you begin the journey to Build your dream to reality start with the most basic i.e. never complicate things up.
Before you start working out you must have a clear idea of what you are going to enter into and have a simple plan of action ahead of you.
Create a simple & sound Business Plan
I believe the first and important step towards an effective financial management strategy for a startup is a sound business plan.
Simply, because a complete business plan includes several components that are crucial for good financial planning.
The Structured planning can make all the difference required to the growth of your business. It enables one to concentrate on the resources like on improving profits, reducing costs & increasing returns on investment made.
Business Plans help in defining the budgeting which is the most effective way to control the cash flow, allowing one to easily invest in new opportunities at the appropriate time.
Minimize your Expenses with strategic automation
For the time being in the starting phase getting one’s finances under control also requires them to minimize their expenses.
In today’s times of technology, there are dozens of online systems and software programs available that have automated tons of small business functions.
Be it Accounting, website hosting, marketing communications, payroll or more many have benefited from programs and services that make it easier to manage facets of business.
If relying on the Technology is not your thing, one can simply shift the responsibility of certain business practices to another business or consultant i.e. outsource them.
When it comes to outsourcing tasks a debate begins:
To many, it might seem that hiring an outside vendor will result in spending more money.
That’s true it does. But if you see it with a Short- Term perspective the truth is, in the long run, when you delegate certain tasks to subject matter experts will save you money and should generate even better results.
Like an accountant will almost always find more deductions and will keep you penalty-free.
Perform Cost Benefit Analysis
Performing a large-scale cost-benefit analysis of different advertising, services, and even employees helped me maximize profits.
Whether it comes to goal setting or deciding on the best plan of attack, working up a cost-benefits analysis will always help you decide just which way it would be best for you.
Every one of us does intuitive cost-benefit analyses every day of our lives, like sometimes as when we ask ‘whether it would be economic to go a specific destination via cab/car or by train?’ same way one can apply cost-benefit analysis to their business decisions.
One may not realize it, but their financial security is also as valuable as their sales generated profits. Hence one must focus on their expenses as much as sales.
Consider your People I.e. Invest in Talent
We all agree startups hire slowly.
However, Matt Wilson from Under30Media says; if the right person comes along who you want to build your team around, you should do everything in your power to hire immediately. If you are truly building a business for the long term and trying to grow your enterprise value, you should make the sacrifices, cut your salary, and do whatever it takes to bring this person on.
It is necessary that when one is looking for insights into their businesses spending, they don’t forget to properly track the investment they make in their team building.
As it is you with your building and developing a team who will take your business ahead to the high’s you want to reach at.
Make Regular Reviews
Every month isn’t enough! Nearly every week (or maybe more), I’m checking in on both my personal and business finances—cash flow is king!
This is said by Derek Flanzraich.
Regular rechecks or reviews are needed always to track your update and id required to remodel the working and management.
Get required help or have a Financial Mentor
Like everyone has someone they can talk to about the ups and downs of running a new company, someone who helps them make the tough decisions.
Same way this same adage goes for keeping your money organized.
Having outside help allows one to have an unbiased view of other’s finances and helps the person be smart about them.
One can questions and discuss issues as they come up, rather than being bogged down in an echo chamber of their own voice.
Money is a critical tool to building your vision into a reality.
One must take the time to learn what areas you are the most profitable, have the business save some money and make sure they have got someone great to help them with it all.
Having a Mentor helps you define your vision and rectify it.
Never forget to collect payment!
You may say how can one forget that, but trust me with sometimes delays from Client end and the workload from your end I have seen it slip through the mind of many.
Like you keep a track of your expenses time to time same way track invoices and customer payments
Try and devise a system receive payment faster from your Clients enabling you well to budget your taxes as well in advance using the forecasted monthly income and receive your payment instead of yourself taking care of the expenses.
Do you agree with the shared Fundamentals?
Have you taken note of your Finances?
How healthy are your business finances?
Share your views in the comments section below. Also if you have any other way which you have been using to manage your Finances, who knows it may help someone!
I help business owners Build their Brands and make them irresistible, profitable & simple to run.
I want to help you build your social media and it's marketing, business growth and digital strategy with confidence, so they're not just successful, but authentic as well as reliable.
If you are not a Business owner, don't worry for you I have services like Finance Management, Retirement Planning and much more to offer!
Other than work I'm someone, who love's 2 enjoy life, I love to keep things sweet n simple just like me!!!
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