Getting your business off the ground can be challenging in many ways. But perhaps the most challenging aspect of launching a startup involves funding your business in the early stages.
Getting the cash flowing and keeping it flowing is the lifeblood of your operation. Without cash flow, you can't pay your bills, hire your staff, purchase your inventory, or keep your customers coming back. However, you don't have to have an MBA to generate big-time profits. All it takes are basic street smarts about the key ways to best use—and not lose—your money.
Here are some simple finance strategies to help get your operation off to a running start.
GET CLEAR ON EXACTLY HOW MUCH YOU NEED
Far too often, new business owners launch their operation without a clear understanding of exactly how much money they need to make in order to meet their basic financial needs. But this is a recipe for failure.
By establishing clear goals based on the reality of how much revenue you actually need and how many clients or sales you need to generate that revenue, you will be able to stay focused on taking the actions needed to achieve your financial goals, rather than wasting your time, energy, and attention wondering what you should be doing.
EXPLORE ALTERNATE SOURCES OF CAPITAL
It used to be that if you wanted to start a business, you went to your local bank and took out a small business loan. Local bankers often knew you by name and were excited to help get a locally owned business off the ground. But times have changed.
Today, local banks are rare, and without a successful track record and minimum monthly revenue, most bankers have little interest or ability to finance your fledgling operation. Given this, you may need to seek alternative financing. Fortunately, you have an array of options you may not have considered. From crowdsourcing and peer-to-peer lending to invoice funding and purchase-order financing, there are numerous financing options to help solve your money start-up issues.
HIRE INDEPENDENT CONTRACTORS
While using independent contractors (ICs) might not seem like a financial hack, it's actually one of the most valuable. In the not-so-distant past, most businesses relied on a mix of full and part-time employees to manage their day-to-day operations. But hiring, training, and firing employees is an entire job in itself, as you may have already learned the hard way.
Because you'll likely have limited resources—money, time, and infrastructure—when launching your startup, using ICs on a project-by-project basis can be a lifesaver. By relying on contractors for specific tasks that you either don't have time for or aren't qualified to perform, you can make your business much more productive and cost-effective.
Plus, with the advent of the gig economy and online work-for-hire platforms, finding qualified ICs is easier than ever. That said, it's imperative you have solid legal agreements in place with every contractor you work with, so be sure to consult with us for guidance and support if you need new agreements created.
IMPLEMENT FINANCIAL SYSTEMS
Above all, effective financial management requires sound systems. If your company's financial systems and processes aren't set up the right way from the start, your business is missing the foundation upon which all of your company's financial and tax strategies are built.
At The Robinson Advocacy Group, we specialize in supporting startups to set up effective financial systems. We will help you put systems in place to manage your cash flow so that your company has a rock-solid financial foundation that won't suddenly collapse when the going gets rough.
TAKE YOUR BUSINESS TO THE NEXT LEVEL
Getting a handle on your finances will not only help mitigate the risk of your startup running out of money, but it will also free up your time and energy to focus on the big-picture responsibilities needed to ensure your business not only survives, but truly thrives. Contact us today to get started.