5 Vital Financial Tips Startup Founders Should Pay Close Attention To

Sun, May 4, 2014

Financial Advice

Who wants to work a normal 9-5 job in this day and age? Maybe if you’re a lawyer, doctor, or engineer you’ll be able to earn a great living, but these days young people with any knowledge of computers want to build a startup. Building your own company is a great idea, but one of the biggest problems people face is how to look after their finances if they’ve not been given millions of dollars from angel investors. Here are a few financial tips startup founders should pay close attention to if they want to succeed.

Start with an emergency fund

In an ideal world you would have thousands of dollars tucked away in an emergency fund in case something unexpected happened, so I would encourage you to start putting money away now before you even think about working on your startup full-time. If you don’t have anything in a savings account you’ll not have anywhere to turn to when the money runs out. Even when your startup begins to earn a profit you should still keeping putting a little away into your emergency fund.

 

Be careful with marketing

When you begin to use paid traffic you might end up with a winning campaign and a lot of people will start pumping more money into the campaign because they know a lot more will come back out. In theory you’ll definitely make more money in the long-run, but you might not recoup your money for weeks or even months. This means all your money will be tied up and you might end up going under because you don’t have any immediate cash flow available, so it’s always better to build up slowly.

 

Look for financial help

In most cases you have to spend money to make money, but you sometimes need to spend money to save money too. This means paying for proper financial advice so your company doesn’t end up sinking into the ground before you have a chance to become successful. Don’t assume you will know how to deal with your finances correctly, because I bet many startup founders thought the same way and they’re now flipping burgers and living in their parent’s basement.

 

Track all your expenses

Only a fool would try to start a company without tracking all their expenses, yet you’ll find there are lots of fools out there who neglect to do this. Maybe they don’t realize how important it is and I hope this is the case, but some people just don’t think they need to. When you track your expenses it’s much easier to make sound financial decisions because you’ll see where your money is going every month. You will stay in the race longer when you can cut out unnecessary spending if it’s not helping you.

 

Start from home

Even if you have money to spend on a fancy office you should still start with an accessible home office your small team of employees can work from until you’re making a decent amount of money. Anything you spend on rented office space could be thrown into something more important like your marketing campaign. You’ll find a lot of startups begin their journey squashed together in the founder’s home and because everyone is working closely together it can sometimes give you an advantage over competing businesses.

 

It’s not as easy as you think

You’ll end up working so hard people will need to start pushing you around in a wheelchair because you’ll be too tired to walk, but at least you’ll have a much greater chance of success if you have your finances in order. The tips we’ve talked about today could come in very handy, so keep them in the back of your mind as you move forward on your journey.

Author Bio: The author of this post Yorrick, is a freelancer by profession. He is currently plying his trade at Freedom Lift Systems. He is a staunch supporter of the work from home culture and believes in being his own boss.

 

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