I’m not a legal or financial professional . . . I’ve just started and bootstrapped a lot of businesses. Building a company from the ground up is one of the most difficult things I have done.
If you are thinking of launching a startup, my hat goes off to you because it’s far from easy. Here are eight tips to help you avoid some of the common financial mistakes entrepreneurs make when starting a new business.
1. Cash flow management is key.
Most startups fail for a variety of reasons, but one is far more common than others -- running out of money. You need to know where every single dollar is coming from and where every single dollar is going.If you don’t stay on top of your cash flow, you are going to put your business in a very dangerous position. It doesn’t matter how good your idea might be when you run out of money you hit a brick wall. Establish a budget and stick to it.
2. Track and monitor all spending.
With a new startup, there are going to be expenses coming at you from every direction. Hiring a full-time staffer to handle the books in the beginning isn’t very budget-friendly, so use accounting software to remain organized.Not only will this help with cash flow management, but it also makes it much easier when tax time rolls around every year. As you grow and the accounting becomes more complex, you will need to consider hiring a professional.
3. Limit your fixed expenses in the beginning.
In the beginning stages of a startup, keeping your expenses low is the key to longevity. You don’t need a huge elaborate office in the heart of your city or fully catered meals three times a day.View source to continue reading https://www.entrepreneur.com/article/290617
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