How To Manage Finances In The Early Days Of A Business
We all agree that it is a world of start-ups now. You do not need a sophisticated degree from the top 50 universities of the world or a lot of resources at your disposal to enjoy success. Today, the meaning of success and a satisfactory career have changed with the introduction of many new concepts such as start-ups, flexible working, work-from-home, online trading, and many other such options.
People have begun to see a different aspect towards career altogether. That being said, launching a start-up will, however, require you to be gifted in other aspects and the most important being good management traits. Be it any business, you need to be well qualified in terms of both the technical aspect and the management aspect, if not you will be seen to hire an outsider to manage the business for you, which may not prove the purpose of why you actually started your own business.
This article throws light on how you can better manage the finances of your business, especially during the initial days, when all you see is an outflow of money and hardly any inflow, which makes the entire management process so overwhelming. Continue reading to know more.
- Keep a record of day-to-day management activities including every important and the not-so-important matters. You must account for all income and expenses.
- Make time to review your records. Making a record of all the costs is just one part of your financial management tactics. However, to make it complete you need to review every cost in order to identify areas for
- Always project your finances, as this will help you to foresee problems and other monetary roadblocks that are likely to hamper your business growth in the future.
- Keep your invoices up-to-date and maintain a system to handle payments including follow-ups and cross verification of invoices.
- Maintain separate bank accounts for your business and personal expenses. Never mix one with the other, as this will create accounting and taxation problems in the future.
- Just because you own the business does not mean you can dig in on the profits completely but at the same time set aside a payment for yourself for the efforts you out in just like another employee. This is a good way to ensure that the company makes profits without all of it being devoured before you can even notice.
- Set aside a safety fund for unexpected financial emergencies.
- Just because you are in charge of your business and you get to put your business bills on the company, do not overspend. Remain frugal and opt for simple means even if it means selecting a simple hotel, traveling mode, restaurant, etc.
- Hire a legal team to handle all the legalities of your business but do not let it go overboard and over the course learn a few basics of the trade to avoid the exorbitantly huge costs from several online resources and experiences.
- Plan all business expansions wisely. Just because your business is doing well in its current state, the same may not be true when you try to expand. An expansion gone wrong might shut down your business completely, as there is a lot of money at stake.
- Focus but do not overdo marketing activities.
- Plan on renting or outsourcing rather than buying or hiring, if the costs turn out to be more than anticipated.
- Save on capital for the next couple of months. You may think that you have enough to get past the initial start-up phase but end up having not adequate funds until the break-even period.
- Never spend prematurely, as this causes blockage of funds. However, know when to seek a loan or funding for business needs before you try to wait it out only to realize that there is no turning back now.