Hello WU Friends!
It is often a difficult task to establish a formidable financial infrastructure especially when you are starting a new business. At the early stage, most entrepreneurs are faced with dealing with complexities of bookkeeping, accounting, and taxes. Here’s how to stay on top of it:
The truth is that managing your startup finances is not as difficult as most people think, because you can actually operate on a low budget while keeping track of your financial activities with technology. For example, a simple Excel spreadsheet can help you to track your cash inflows and outflows.
Here are some of the great ways you can manage your startup’s finances from day one:
#1 Manage Your Expenses
As a startup, you will be dealing with a lot of expenses from different directions. At the initial stage, hiring a full-time employee to be handling your cash inflows and outflows may not be budget friendly. So, you may have to try using an accounting software to do this task. This will be beneficial to you for many reasons. Besides helping with your cash flow management, it will also make it extremely easy for you to do tax time rolls annually. But you will need the services of hiring an accounting professional as the business begins to expand, and accounting will become more complex as you grow.
At the start of your business, you will never go wrong by lowering your expenses. In fact, it is important you try to do more with less funding. You don’t need to rent a luxurious office at the heart of your city. Always focus only on things that will take your business to the next level, not on things that you don’t actually need.
#2 Maintain Financial Stability
As an entrepreneur, you need to keep your personal and business accounts separately – don’t mix the two. This is necessary so that you can actually save money for yourself, and protect yourself from liabilities resulting from legal or corporate debts.
Define your own job description in the business, and pay yourself your due earnings. Although this is your business, you do need to create a formidable financial plan for yourself. If you don’t know how to get this done, then you can talk to a professional economist, auditor or accountant to assist you with details.
If you are facing severe financial hardships such as debt consolidation or bankruptcy, then you can seek for the services of DMB financial. They will help you out of this situation as quickly as possible. Most entrepreneurs are not aware of this fact, and that is why their businesses unexpectedly go down the drain. You will never go wrong by maintaining financial stability.
#3 Monitor & Measure Performance
As a new business owner, you really need to keep a track record of your business’ expenses. Your account department should be updating you with the financial transactions, and that includes both your past and present financial statements. Having an overview yourself is very important because it will protect your future revenue, expenses and cash flow early on.
By staying up-to-date, you will know in clear terms whether your business is overperforming or underperforming. Monitoring your business performance is very essential as it will help you to maximize efficiency.
#4 Focus On Your Niche & Delegate When You Can
As an entrepreneur, you are already spending much of your time and energy in harnessing your business potentials. So, you don’t have to make life even more difficult for yourself. All you need to do is to simply focus on your niche; you need to focus strictly on what you are good at, what you know and what you are passionate about.
When you do this, success usually comes much faster. Focusing on things that are not within your niche will make crash and burn quickly. Thus, focusing on what you do best is one of the most important things you can do today. You can delegate or outsource other areas you are not proficient in, such as customer support and administrative tasks.
#5 Reduce Overhead
You need to sit down and create a competitive budget for your business. If you are spending too much on renting a luxurious office space, then you can consider sharing an office space or going completely virtual instead. With this, it will be easy for you to achieve more with less funding and run operations on a highly competitive budget.
#6 Understand & Plan Tax Payment
If you can’t understand and plan your taxes, then it will be extremely difficult for you to run your business. Often, entrepreneurs don’t personally get involved with tax issues but rather pay whatever amount their accountants tell them to pay. However, if you get into this matter and plan ahead you can reduce the number of business liabilities, save money, and create efficiencies.
Whatever industry your company is in – make sure to focus on the things you really need to strive instead of the “nice-to-have’s”. Managing your business’ finances from day one will ensure success in the long run.
Author: Kevin Tomlinson