Every day, start-ups are born. The decision to launch a start-up is not for the faint-hearted, so congratulations if you’ve taken the first big step. With the rave about ‘being your own boss’, your decision to start-up a business needs to be guided by working financial principles to ensure success and that you stand out of the pack.
You need to identify common financial mistakes to avoid and how to make wise use of your startup capital.
Here are some tips to help you:
Manage your cash flow
Lack of financial accountability has caused many businesses to begin and crash prematurely. You need to know where every kobo is coming from and where every kobo is going. No matter how grand your start-up idea is, without careful money management, it will not survive.
It is important to monitor your cash flow critically, to avoid setting your business up for failure.
You must put measures in place to handle your accounting. If hiring an accountant in the beginning is not budget-friendly, check the internet for accounting software to help you stay organized.
With this in place, your cash flow can be managed optimally. As your business grows and the accounting becomes more complicated, you can consider employing a professional accountant.
Keep your fixed expenses to the minimum
When launching a start-up, generating revenue should be your top priority, not expending your seed money. Bear this in mind and keep your expenses low to ensure a long life for your business. Why furnish your office expensively when you can make do with the basic necessities to run your business? Why look for a large space when all you need is a moderate business space? Many startups make this mistake by focusing and spending on the wrong things.
Spend reasonably so you can channel the bulk of your capital to growth, which will enable you to someday enjoy any additional features you want.
Monetise your time
Don’t spend so much time going for meetings that are unrelated to your business or browsing social media platforms for pleasure rather than business during business hours. Plan your daily schedule and adhere to it. Time is money and every second you spend doing something that doesn’t add to your business is time and money wasted.
Want customers? Get them
Customers are the life of any business. Your company has greater chances of growing when you learn how to acquire customers and retain them. Once you learn different channels of getting customers, optimize them to cut costs.
Because it is nearly impossible to test every customer lead generation channel in the beginning, focus on the most lucrative opportunities you have identified to maximize the use of your time. When you successfully scale those, you’ll have the available finances to explore other channels.
Plan for your future
Even entrepreneurs someday retire. What plans have you made for retirement?
You are responsible for your retirement, so when you start making money, consider things like a Retirement Savings Account. Set aside money for that time in your life when you finally rest and enjoy all you have worked for.
In addition to this, consider micro-investing opportunities. Some investment companies offer the direct debit option where you mandate a certain amount to be deducted periodically (e.g weekly, monthly e.t.c) from your bank account to service your investments. This way, you can concentrate on running your business while your invested money accumulates to guarantee you a secured future.
Pay Yourself
You have needs and should cater to them by making sure you pay yourself each month. You don’t need to compensate your hard work and dedication with a fat salary at the start, but enough to live decently.
When the personal financial stress is taken care of, you are super-charged to stay focused on building your business.
Set financial goals
It is not enough to decide you want to build a multi-million Naira company. Breakdown your financial goals into small, reachable and measurable targets.
Breaking your goals to daily, weekly or monthly targets help you stay on track and make any alterations necessary to achieve the bigger goal. Imagine the confidence boost you get when you consistently hit those little goals? They make you feel powerful enough to blaze consistent trails in your entrepreneurial journey.
Now is the time to get to work on nurturing and watering your seed. Keep your garden free of weed. Many years down the line, your seed will grow into a tree that gives you and those coming after you comfortable financial shade.
Interested in lucrative opportunities to invest the returns from your business? Explore the possibilities here.
