As a startup, managing money is highly important to the success of your company. Any type of business venture requires a smart focus on its financial health, but especially a startup where you need every last cent to help your idea succeed.
Perhaps your focus is more on the details of how to make your startup work in terms of managing your team and less on accounting. These four tips will help you succeed in the area of money as well.
1. Streamline your bookkeeping
Let’s face it, gone are the days of paper bookkeeping. For one, it’s a waste of paper and not good for the environment, and two, it’s an outdated and time-consuming way to keep track of your company’s finances. Even a spreadsheet on your computer is something better left in the past. Instead, consider using small business accounting software that provides you with an easy-to-manage format to keep track of your money. You can also easily access current financial data with this software, making it a much better and more accurate way to take care of your money. These easy-to-update sites and apps make bookkeeping so much easier than in times past, and when it comes to your startup’s accounting, it’s worth it.
- Save and build up your cash reserve
Rainy days happen, as 2020 taught us. For a company to succeed through the hard times, it’s a wise idea to save up a cash reserve. Professionals will often suggest a few months’ worth of expenses saved up so you can continue to operate should unexpected circumstances occur. It’s wise to think of the longevity of your startup and putting away some money can help you think ahead. In 2020, when businesses were forced to close and shut down because of social-distancing and shelter-in-place orders, many companies ended up shutting their doors for good because they didn’t have this cash reserve. Take notes from the year Coronavirus showed up and play it safe.
3. Hire a professional
Running a company, fulfilling your tasks, and making sure to increase profit as a small business can be challenging. Add accounting into the mix and you can find yourself overwhelmed and unable to successfully manage your team and company. Instead, consider how hiring an accounting manager or even working with a local firm can help you streamline things in the company. This way, they stay on top of the money while you stay on top of making sure the business succeeds. Of course, take your time to make sure you’re hiring someone who is going to handle the money well and who has the expertise to manage your money effectively, so you can save and avoid any financial downfalls.
4. Stay true to your budget
As a startup, you will want to be careful with how you spend your money. Your first step is to create a budget. How much do you need to pay your team? What does your office rental cost? Do you have coworking events to keep spirits high? These events should go in your budget as well. Factor in everything from office supplies to even your own salary, and once the budget is created, make sure that the company sticks to it. While every budget should have some wiggle room, you don’t want those extra expenses to be too high. Save money for any financial emergencies that could come up in the future—as mentioned in tip #2.
The Bottom Line
You know the saying, “Money makes the world go round,” and when it comes to startups, it couldn’t be more true. To ensure your success, you’re going to want to be more careful with how money is spent than almost any other factor. When you expertly plan for solid financial health, you’ll sleep easier, knowing your company and it’s money are going exactly where you want them to.