The startup culture is booming and young entrepreneurs are buzzing with ideas that are desperate to see the light of the day. With money being a crucial element in any business atmosphere, the relevance of money for a startup is a tad bit more controversial. Without a funding in sight, and even with one scored in the basket, startups have to be very careful with the way they break their budget into baskets and how they choose to spend it.

When running a start-up there’s so much to think about – from ordering deposit slips to setting up payroll. Getting the basics right when it comes to money management, however, is crucial for long-term success and will set you off on the right foot. So, if you are a startup that is struggling with their money management strategy, here’s some help.

1. Take cashflow management seriously

Starting a business is not easy. Your financial literacy needs to be on point and that means knowing where your money is coming from and where it is going. This might sound obvious, but more than a few start-ups have run out of cash in the past and been forced to shut shop. So, it’s really important to take a good hard look at your finances to avoid overspending – or not spending enough on things like software which could help your business to become profitable sooner rather than later. Don’t be afraid to ask for help with this – it’s not as easy as managing your home finances.

The cash flow for a startup is also concerned with the way the business chooses to break down their investment. It is imperative to choose to distribute your eggs thoughout all baskets; strategy, marketing, content, customer support, R&D, etc.

2. Make the most of accounting software

Making rough calculations simply won’t do when it comes to tracking and monitoring all spending. Human error can leave a huge dent in your bank balance which could have a detrimental impact on your business, so how about making the most of accounting software? Not only will this allow you to manage your business expenditure in an efficient way, it’ll make recording expenses easier than ever. Photograph receipts if needs be, just make sure everything is recorded.

Being a startup does not mean that you can skip the need for an accounting software. It is very important to be formal and have everything in its right place right from the moment your business commences. With access to customizable reports and dashboards, you can instantly make sense of how your business is performing and tweak where necessary. Often, a visual representation is much more effective than trying to vision your finances in your head or in paper.

3. Don’t hire for unnecessary positions

Many start-ups are unprofitable for the first few years. That’s normal and, with the right cash flow management, this isn’t always a problem. The issue comes when you start spending without giving the decision a thought. Hiring for unnecessary positions off the mark is a great way to put your business in danger.

For instance, you don’t need a HR manager if you’ve got a team of two. Or a cleaner if you’re working in a small space and can do the work yourself. You don’t need a full-time content writer when hiring freelancers is a great way to launch your start-up. Build slowly and strategically. However, make sure you do not compromise on the key positions that will help you run your startup smoothly and take it to advanced heights.

4. Utilise free tools

On a similar note, why splash out for expensive consultants to guide your business when you can research hard and make the most of free tools? Thanks to the internet, there are so many tools out there that can pricatically help you build your business and run it smoothly. There are always freemium tools available that you can eventually choose to buy.

For instance, if you want an optimized website, for instance, it’s important to clue up on SEO and do extensive keyword research with the help of KWFinder, Google Analytics and other tools. Similarly, learn how to analyze the performance of your own website through Google Search Console and make the most of social media tracking tools rather than always being prepared to splash your cash on expert advice. It’s often not needed in the early stages.

Since every startup needs to make an impression right from the start, Client communication and team collaboration tools are a must. You will find free tools like Slack and Zoom to help you accomplish the same. Always be on a lookout for Black Friday or Cyber Monday sale where you can bargain and get a great deal.

5. Understand that time is money

Time is quite literally, money. This is important for all start-ups to remember. Don’t spend your time sweating the small stuff that won’t help your bottom line. Instead, be more strategic and think about what you need to do to drive your business forward. Keep this in mind if you do hire staff too. There must be a very clear reason why they’ve joined your team, otherwise you’re simply putting extra pressure on payroll. It is important to dedicate your time and efforts in the areas that demand it and deserve it. Beating around the bush is no good and will only kill the integrity of your efforts.

In a nutshell

The key to running a successful startup is by setting up clear communication with partners and employees and other contractors. Always be open to suggestions but make sure that these suggestions are properly weighed down before they are acted upon. A brainstorming session could always make the difference in your pockets at the end of the quarter. However, money management is the key to running a successful start-up. With money being a very crucial startup element, it is a compulsion to keep an eye on every spend and spending good money on what actually works.

About the author

Mark Coleman

Mark Coleman is the editor at MarkupTrend. He is also a technical writer and digital marketing expert. He handles all marketing, advertisement related activities at MarkupTrend along with his team.

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