Launching a startup can, and almost always is, a difficult venture. Now that doesn’t mean you shouldn’t try it; in fact, it’s all the more reason to go for it. As you’re gearing up to launch, it’s important to know that numerous components go into making a successful startup. Perhaps one of the most significant components is the financial backing you need to sustain and grow your business. If you’re completely clueless on how to finance your startup, don’t fret. Here are a few tips to get your startup on the right track.
Know Your Cash Flow
Establish a budget that is manageable and adaptable. You should know exactly how much money you have, what’s coming in, and what’s going out. One of the top reasons startups fail is because they run out of money or mismanage the money and resources they have. Avoid this situation from the start and budget your funds down to the penny.
Startups are usually started with limited funds, as founders search for investors (and customers). Don’t overextend yourself in the beginning stages by renting out a space you can’t afford, hiring too many staff members, or buying fancy amenities. Your number one goal, in the beginning, is to generate steady revenue. Start small and grow from there. It’s easier to expand than decrease in size.
Time is Money
Burnout rates are high in startups. Launching a startup is a lot of work and generates quite a bit of uncertainty, which can be very taxing on individuals. Know you and your staff’s limits. Time is money and overworking your staff will depreciate over time because you all will be exhausted and less eager to give it your all.
Create a Strong Customer Acquisition Plan that Fits your Budget
Know exactly whom you are marketing your startup to by building a customer acquisition plan that you can afford. This should be one of the first things you do so you know how to reach and influence your customer base. Keep monitoring and evaluating how your customers are reacting to your product, because after all, you’re running a startup to serve your customers and make a profit from their business.
Set Future Budget Goals
You should know what your financial goals are and where you want to be in the future. Make daily, monthly, and yearly goals with systems set in place to monitor how effective you are obtaining your goals. Your future self will thank you for being proactive and setting high standards for your future financial stability.
Financial stability is challenging when running a startup, but implementing some of these tips will help set you up for growth. Have any other financial tips when launching a startup? Tweet @StarterNoise.
Derek Rundell, is a successful business leader, operator, and serial entrepreneur. Derek has founded, managed and sold businesses in the technology, media and finance industries. He sits on several boards and serves as an advisor/investor to numerous established businesses and startups. Startups are Derek’s real passion, and in addition to building his own portfolio of technology, media and financial ventures, he invests in and mentors startups and entrepreneurs. He is passionate about sharing his knowledge and helping other businesses succeed.