Startups are fascinating, fun, and—occasionally—frustrating. Especially when it comes to managing your startup finances. Many startup owners are focused on their ingenious new idea, but few stop to seriously do their homework when it comes to the financials.
Today, we’ll go over some of the most crucial budgeting guidelines that any entrepreneur, especially those who are new to the game, should be aware of. Take notes as you read to see how you may take your business to the next level.
We’ll cover: tips for just getting started, how to build revenue, and how to keep your company growing.
Step one: getting started
Business owners often agree that startup financing is one of the most challenging aspects of any business venture. When you’re first opening up shop and don’t have any consistent revenue streams available yet, it’s hard to know where the next source of capital will come from. In some cases, business owners may be able to rely on investors to provide them with seed funding—but it’s important to remember this isn’t always the case.
The best place to start? A small business loan. Small business loans are available through different sources, such as the US Government’s Small Business Administration, as well as from banks and lending agencies. Looking up small business loans in your area is a great way to get a jump start on your startup financing when you’re first getting your sea legs.
Alternative funding options include:
- Business partners
- Angel investors
- Capital from benefactors
- Government grants
Be sure to scour every possible source when determining the best finance options for your company.
Step two: building your revenue streams
Once you’ve secured startup funding and you’re ready to start actually running your business, your next challenge will be securing various revenue streams. All too often, startups don’t think beyond their brilliant, disruptive idea and end up not having a good model for how to consistently turn a profit and be consistent on wealth management.
Instead, be sure that you sit down with your leadership and management team, understanding the ways that you can navigate the market. Do you have competitors? How do their business models function? How many units do you have to sell to keep your organization viable each month? How much are investors expecting as returns?
Answering these questions will put you in a good position to move forward once you have a solid grasp of your profit-making model.
Step three: growing and scaling
It’s a saying as old as business itself: if you’re not growing, you’re dying. And while that may sound harsh, in many cases (especially startups), it’s all too true. Many startups need to start seriously considering how they will scale as soon as they can. Why? Because the point of a startup isn’t to be a small local business. It’s to rapidly disrupt a market and prove that it’s a value-adding addition to the ecosystem. That means scaling quickly and getting noticed.
SO, what can you do? The answer is simple: plan your scaling moves on Day 1. Don’t just get there and hope for the best. Instead, build it into your business plan. Sit down with the product designers, leaders, and accounting teams and listen to what they have to say. Then, see if together you can devise a plan for taking your new startup from your garage base of operations to the front page of the app store.
Startup finances are challenging; no one can deny that. However, by taking the time and effort to actually think about your new organization’s plans, you’ll have a much better grasp than many others in the entrepreneurship space. Now that’s a competitive advantage.