Ultimate financial tips every entrepreneur should know

A startup is born with an idea, a vision. Bringing this vision to reality requires the entrepreneur to overcome huge bumps or, rather, walls like raising funds.

But the most difficult part comes after you’re successful in raising funds and getting your startup off the ground — managing your finances. So before you’re big enough to hire a finance guy, you’ll need the following financial tips to keep your startup floating.

financial tips1. Manage your cash flow

The most common way for a startup to fail is by running out of money. How can you avoid it? Simple, by keeping track of every single dollar. You need to know where every dollar is coming from and where it’s going. This is called managing your cash flow. If you don’t do it, you’ll soon hit a brick wall. So make a budget, just like you’d make to manage your bankroll while playing mobile app slots, and stick to it.

2. Track and monitor your spending

In the previous step, you noted down where your money is going. Now, you need to know how much money is going there.

As we mentioned in the earlier financial tips, you can’t quite hire a full-time staffer to handle the books, so your best alternative is to use accounting software. Use the software to track your spending for an initial period and use that data to create effective budgets.

3. Prepare for the worst

It’s important that you remain optimistic while running your startup, but it’s more important that you be prepared for the worst-case scenario. A financial disaster can take down your startup without warning. If you don’t want to go down with your startup, keep reserves. Don’t quit your job until your business can replace your main income and have short-term and long-term investments as a safety blanket.

4. Set financial goals and milestones

Every entrepreneur wants to build a “multi-million dollar company” but it’s easier said than done, even with these financial tips. If you want to achieve such a huge goal without going off the track, break it down into smaller, more achievable goals. These daily, weekly, and monthly goals will act as milestones that indicate your progress. You can use them to stay on track and make any necessary adjustments along the way.

5. Value your time

As an entrepreneur, your time is valuable, even precious. So make sure you plan your day in a way that doesn’t waste your time, and hence your money. This precious resource of yours is limited, so don’t spend it on things unrelated to business.

6. Start out slow

In the initial stages, your biggest priority is to generate revenue. In this critical time, you need to keep your expenses low so you can allocate most of your capital to grow. Avoid prioritizing wrong things like fancy offices and over-the-top perks and keep the operation under control.

7. Pay yourself

Yes, you need to start your business lean, but that doesn’t mean you need to survive on Ramen noodles. Pay yourself, not too much, but enough to give you some padding and comfort. Look at it as a payment for your contribution to your startup. After all, if you’re suffering from financial stress, you can’t focus on the startup either.

8. Acquire customers

The bottom line is — without customers, you have no business. So right from the beginning, you need to figure out how you’re going to acquire customers and scale your startup. Identify various acquisition channels and optimize to lower your costs. Use the most lucrative acquisition channels at first, and once you have the time and resources, then go after the others.