Money doesn’t have to be a scary subject when you’re first starting out. Here’s how you can take your startup’s finances by the reins.
A. Always Give Yourself Wiggle Room
Running a business is expensive. You may be frugal and creative, but there are always unexpected costs that add up. Whether you’re establishing your own budget or trying to raise capital, always give yourself some financial wiggle room. Just remember that it’s not an invitation to spend more, it’s to help you when you need it — and you certainly will. – Nicolas Gremion, Free-eBooks.net
A. Get a Great Business Accountant
It sounds simple, but I’m always surprised at how many people (like me!) thought they could handle their finances early on. A great business accountant who specializes in small businesses is absolutely essential. From filing quarterly returns and sales tax to employee benefits and deductions, there’s too much at stake financially to not have an expert help you navigate. – Brittany Hodak, ZinePak
A. Get a Line of Credit That You (Hopefully) Never Use
When running a business, cash is your lifeblood. Although you should always avoid accruing debt, get a line of credit as early as possible so you have extra “resources” available to cover any dips in cash flow. I’d recommend never tapping into your line higher than your outstanding accounts receivable; it’s good to know that it’s available in emergency situations. – Ross Beyeler, Growth Spark
A. Don’t Be Afraid of Revenue Transparency
The decision to become a revenue transparent company was a scary thought when we first launched our company. We worried about what would happen if our churn rates went up or customer rates declined. Today, we couldn’t be more confident with our decision to become transparent. It has helped us gain trust and positive attention from clients. – Jared Brown, Hubstaff Talent
A. Learn to Control Spending at the Outset
Sometimes, when we launch a business, we think we need every new and shiny tool to help us achieve our goals. Oftentimes, you don’t need much to get started. Weigh each spending decision against the ROI you expect to receive. That should guide your spending at launch and afterward. Tie every purchase into a strategic initiative that helps you get your business where you want it to be. – Nicole Munoz, Start Ranking Now
A. Always Overestimate Your Expenses
When I first started, I created a really fancy spreadsheet and put everything I could think of on it. The problem was that there were a lot of line items that I just wouldn’t know to include until the business was actually up and running. Colleagues of mine also tell me they wish they had raised more money from the get-go too. – Jayna Cooke, EVENTup
A. Manage Cash Flow Carefully
One of the great challenges in business, especially when your company is growing quickly, is managing cash. As a former NBA player, I had minimal expenses related to my job, and I made much more than I spent. However, as the CEO of a travel company, I quickly realized that it often takes more money to run a business than you make. It’s important to manage cash to maximize company growth. – Obinna Ekezie, Wakanow.com
A. Learn How to Raise Capital
Sometimes, when you have a cool business idea, you try and fund it all by yourself. Then, in the process, you realize you need more resources to bring your startup to fruition. Sometimes you have to accept the fact you can’t do everything yourself. – Patrick Barnhill, Specialist ID, Inc.
A. Don’t be Afraid to Price Your Services
New startups tend to be “cautious” with pricing, trying not to scare potential clients away or generate a bad reputation for being too expensive. However, I’ve learned that the opposite is true. If you put a generous price tag on a product, it will be conceived as a much more professional one. No one trusts cheap products. – Yoav Vilner, Ranky
A. Minimize Costs With Automation
When you run your own business, it’s easy to get caught up in the glitz and glam of various marketing solutions and agencies. You can save a lot of money by simply looking for the best automated solutions and SaaS platforms available. Not only will this cut costs, but it will save you a lot of time. – Zac Johnson, Blogger
A. Don’t Invest in Everything at Once
Instead of putting all your eggs in one basket and forcing something to work when it doesn’t, dip your toes in different things and see which fits your needs best. Be open to different strategies, but don’t try everything at once. Instead, put your efforts in the strategy that works best, then slowly try other things on the side. – Daisy Jing, Banish
These answers are provided by the Young Entrepreneur Council (YEC), an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched BusinessCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.