Starting a small business doesn’t instantly qualify you as an expert in finance or even small business accounting for that matter.
The majority of startup companies and entrepreneurs need to learn the inner world of money matters including; funding, accounting and what matters for investors, the bottom line and growing their business.
There are a select group of money matters you should and shouldn’t do to be successful in your business.
Fundamentals to keep in mind
Many first time entrepreneurs have their minds on money. It’s more than just going after the money. It takes a lot of people to come to the understanding that it is more than just the money with a product or service, it’s about true offering where then the money will follow. If you are not necessarily skilled or believe in what you’re doing than conversely you probably won’t make any money, even if that is your main goal.
If you can create meaning and worth to the company then the money issue takes care of itself. It is all about who you are as a leader and the team that you hire to get the job done and the company up and running. Investors like to invest in the people that are dedicated to pushing a successful business forward, not exactly in the business itself. Your team should be equipped in all areas to deal with financing, turning a profit, running the business, and having a vision.
Industry experts are the difference between becoming successful or not taking off. For example, you have to know when to outsource or hire in-house people. If you were to run into any legal trouble you could find a strong team here, sourced from this law firm if financial issues are out of the skillset for most entrepreneurs, you could believe that law is definitely out of their range too.
Building a strong vision
While investors look for strength in the team, the business needs to look for strength from where they receive their capital as well. While fundraising you have to make sure to find someone who shares the same values for the company and business that you have. It shouldn’t just be about the bottom line and making money. If they don’t care, oftentimes it’ll be you left holding the empty bag of cash as they make off with whatever they can scrounge off your business in a sell-off deal.
You want to avoid any types of these scrupulous investor types who don’t want to see you flourish and make money as a business and personal endeavor. Good investors have to be part of the vision and ability to push forward the company by representing them in an external context. They can’t only care about high returns, but also returns because they care about the company.
Leveraging your resources
Online today in our interconnected globalized world there are so many different areas we can save money on through technology. Any type of person can start up a company with a minimal budget and capital if they use the resources out there for them. You can automate parts of your company through social media tools, websites, accounting systems, marketing firms, and many more.
What once used to cost thousands in research and infrastructure costs is a simple application today. Take for example the advent of online payment systems like Stripe or PayPal, each offering a unique and fast way to process cash from customers to vendors.
Staying hands on & learning
Entrepreneurs by definition have to be able to learn a variety of disciplines in order to become successful and grow as a businessperson. Finances should be no different as money is a qualifying action of how successful you are. It is able to get things done and used as one of your main resources to hire talent, grow as a company, and put forth your vision when money matters most.
If you’re in the position of being a leader then you should have access to understand and see the financial data. You’ll be dealing with operations, growing the business and branding, while you’re juggling a whole mess of other things. Try to look into your internal financials on a monthly basis so you know what you’re talking about.
Take care of budgeting all money spent on your business and not overspending on issues that can be done in house or outsourced for quicker completion. Knowing your finances is a step towards managing your small business efficiently.
Ron Walker has experience as a business accountant and often shares his tips on managing business finances in his articles.