A Quick Guide on Managing Your Startup's Finances for Success
In today’s modern business landscape, the challenges that startups face have been growing more and more every day. From increasing consumer demands to fluctuating supplier prices, it’s no surprise that most startups are laid to rest within their first year of operation. Although it may seem discouraging, as a business owner, to see all the statistics and facts about the survival of all types of startups here’s something that you should keep in mind — startups fail because they aren’t smart with their money.
If you were to ask any successful entrepreneur about what they wished they knew earlier, chances are they would tell you how important it is to learn about being smart with your money early in the life of a business. As simplistic as it may sound, financial management is a vital part of every business’ success, especially when it comes to operations that move products (such as commodities like food) back and forth fairly quickly. Thankfully, there are a wide array of financial practices that you can employ when running your startup to ensure security and profit.
Financial management tips you can use
Being smart with your money when starting a business consists of three basic principles: accountability, frugality, and transparency. While most business owners are more than familiar with these principles, the majority of them don’t know how to put them into action. However, we’ve got you covered with a few simple, yet practical tips that you can follow when being as smart as possible with your startup’s money:
1. Learn how to do all the necessary research before saying yes
One common mistake that most startup owners make is that they say yes to everything when working with a vendor or supplier. Saying yes to everything is not as good as it sounds because there will always be an opportunistic vendor. When working with prices and quotes that are given to you by vendors, remember that there will always be room for negotiation or barter, especially if you’re ordering a large amount. However, bartering and negotiating alone won’t suffice for attaining financial security as a startup. Doing the necessary research on market values and cost-effective suppliers is vital.
2. Economize all your startup’s essential resources
When hiring a professional for your business, it’s vital to consider what you could achieve if you were to opt for digital or virtual alternatives. Thanks to the dominant influence of modern technology, more professional skills are accessible without the need for a physical presence. One example of economizing essential resources for virtual means is seeking an accounting software that can do the same work that a full-time bookkeeper can.
Going for digital or virtual means can prove to be beneficial in almost all aspects, especially when it comes to highly-technical tasks that need a certain degree of optimization. For example, getting an affordable and reliable accounting software can help tremendously with tracking business and personal expenses, allocating funds to pay loans and suppliers, and paying bills on time.
Additionally, some professional jobs are viable to economize by getting a virtual worker instead of an in-house, especially if you’re after minimizing costs and expenses. Getting a virtual worker can help with boosting productivity as well, particularly when it comes to capitalizing on expertise and specialized skills. A key example of hiring a virtual worker is getting a virtual bookkeeper who can take on various accounting tasks remotely or a virtual marketing assistant who can carry out marketing campaigns for your business.
3. Go beyond the box or model
One great way to take charge of your finances is to skip spending on unnecessary expenses on beautifying an office front if your product or service doesn’t need a physical space to grow. Nowadays, having a successful business doesn’t require an office. In fact, some successful companies are run from the comfort of their owners’ bedrooms. You can go beyond the traditional business model by cutting back on your office space expenses by setting up shop at home or going for a co-working space.
These are only a few of the different ways that you can manage your startup business’ finances properly for success. Following these essential steps can make a huge difference in your financial performance and quarterly reports.
If you’re looking for Bookkeeping by QuickBooks Certified ProAdvisors, get in touch today! We’re happy to help.