You have enough on your plate as a new startup. The last thing you need is to spend all your time worrying about money.
Unfortunately, this is a trap most new businesses fall into. Problems with cash flow are considered one of the leading causes of business failure.
You need to get your finances right if you want to run a successful startup. Keep reading to learn nine of the top finance tips that will help you keep your new company running.
1. Separate Your Personal and Business Finances
It’s tempting to get started right away when you come up with a great business idea. It’s easy to get going if you keep everything running from your personal bank account. The problem is, things can get hard to track in the future.
Create another bank account you dedicate to all your business transactions. Doing this will help you keep your finances separate and keep track of everything you need for tax season.
A bank can also provide your business services to give you more insight into your business finances. Get in touch with a bank to see what features a business bank account can offer you.
2. Watch the Small Expenses
A lot of financial planning happens with the big picture. You look at the significant expenses you have and try to cut costs wherever you can. The problem is that smaller payments often get overlooked.
Make sure to track every transaction your business makes, no matter how small it is. Small purchases can make up a lot of your monthly expenses if you don’t think about each purchase you make.
Take time every month to make sure these purchases are needed. The chances are you can do without a lot of the little things you buy for your company.
3. Don’t Under-Budget
You don’t know everything that’s going to happen in the future. Even the most well-researched budgets aren’t immune to changes. It’s a problem if you don’t leave enough padding for going over-budget.
Always be sure to overestimate how much the cost of a project will be. Having enough padding means you can adapt to last-minute changes and give your customers the products they are looking for on-time.
4. Limit Your Fixed Costs
It used to be expensive to start a business. You needed a storefront, employees, and a handful of other expenses. Things are easier now that we have the internet.
This means the cost of starting a new business is lower than it has ever been. Try to use this to your advantage by eliminating as many fixed costs as you can.
The leaner you can keep your business, the better financial health you’ll stay in. You’ll be able to save more money for future expenses and invest in the growth of your company.
5. Plan Ahead for Taxes
You can’t get away with waiting for the last minute to file your taxes as a startup. Things are much more complicated when you file taxes as a business.
Not only do you have to keep track of your income, but you also need to track deductions and payroll expenses. If you wait until the last minute to gather your finances, you might not have enough time to finish everything on time.
6. Focus on Your Customers
The best idea in the world is worthless if people don’t know about it. If you want your startup to succeed financially, you need to find your customers and make them happy.
Talk with your customers regularly to find out if they are happy with your service. Your goal is to look for problems and fix them, so your customers don’t leave unhappy.
The happier you can keep your customers, the more likely they will be to buy from you again and recommend their friends.
7. Find Additional Funding Sources
Even if all your finances are perfect, you might not have the cash flow you need to expand your business. Having another source of funding can help accelerate things.
Look for small business loans and credit lines for when you want to grow. Make sure you create a plan for using your funds if you go this route. You don’t want to raise funds for a bad idea and put your business into debt.
8. Make It Easy to Pay You
Staying on top of invoices is one of the most vital parts of a new business. Unfortunately, many people still rely on the old ways to keep on top of things.
If you’re using email and paper documents to manage client payments, you’re doing things the hard way. You can make things easier on yourself and your customers by using online tools to handle your payments.
Online software like Banq24 will give you the ability to send and receive payments online. You can log in to see any outstanding payments you’re waiting for, and automatically send reminders to overdue customers.
9. Hire an Expert to Help
It takes a lot of work to run a startup. If you spend all your time focusing on money, you might end up losing focus on the things that make your business work.
Instead of spending time on the thing you aren’t an expert at, bring in somebody to help with your accounting. Reach out to the accounting firms in your area to find someone who can help.
You don’t need to hire somebody full-time. You only need someone to look over things once in a while and inform you of problems and places you can save money.
Don’t Ignore the Top Finance Tips Out There
It only takes one mistake to wreck the finances of your business. Always keep the top finance tips in mind, so you have insight into everything that happens in your business. The more information you have, the better decisions you’re going to make.
Once you get your cash flow under control, you can start working on the essential parts of your business. Keep reading our blog to read the latest business news and tips that will help you move the needle for your business.