Tammy Broccas July 27, 2018
startup finances

Establishing a strong financial infrastructure is critical when starting a new business, yet it’s often an afterthought for early-stage entrepreneurs. Every organization is always interested in one thing – managing financial transactions. Running a business requires making a lot of financial decisions. What practices can you use to help you manage your startup finance efficiently?

1) Putting a cap on operations

Haven’t we all heard success stories that started from a one-bedroom apartment or garage? For an early stage startup, the start is usually not with a splash. With modest means, you can start small to save on running an operational office. Until you raise your first round of funds, you should handle your finances cautiously. If need be, don’t hire any new employees other than the core team.

Also, you should not raise funds if you don’t really need it as it will be the most expensive cash you ever buy!

2) Manage and log in all your expenses

It is crucial for every entrepreneur to keep track of all their expenses to ensure they are not going overboard. When you start, keep it basic.

You should also learn timeless principles of managing your expenses. To do this, read financial statements to know about your money, income, and expenditure. If your costs are higher than your profit, then your startup will sooner or later collapse. Maintaining financial stability requires knowing four essential details as listed below:

Balance sheet – This reflects shareholders’ equity, liabilities, and a company’s assets.

Income statement – This reflects the revenue your organization makes within a specified period.

Statement of shareholders’ equity – This represents the funds that the business gets through preferred and common shares.

Cash flow statement – This analyzes your cash inflow and outflow, investments and operating activities.

Documenting transactions right from the start doesn’t take much time. In reality, it really comes in handy later during fund raising when the due diligence is…
 

Discover more on this website

5 ways to promote your new business through the in... The internet is changing the way we do business. That notwithstanding, who would have imagined that someday, millions of people will start earning a living working online, not to mention a new era where students in need of he...
5 tools to increase revenues for your small busine... If you are the owner of a small business, congratulations on your efforts. Do you know that small businesses have contributed more to economic growth than large-sized businesses? They have created more jobs, more opportunitie...
Engaging with your social media audience effective... As an entrepreneur, one of the most important things you need to work on is getting your name out there. Your business is next to nothing if anybody barely knows it exists. Hence, you must put great effort into your marketing...
The end of the traditional 9-5? More than two-thirds of global employees work remotely every week, and over 50% do so for at least half of the week, heralding a major reassessment of corporate real estate, according to a comprehensive new global study. T...

Leave a comment.

Your email address will not be published. Required fields are marked*

Pin It on Pinterest

Share This