With a fledgling business, it’s important to save money wherever you can to establish yourself in the field. Too often, young startup businesses don’t manage their money well and go bankrupt in the first year of business. Prevent this pitfall by working to improve your cash flow with the following tips.
Rent Equipment Instead of Buying
When starting up a new venture, you might think that you need to put down a large initial investment to get all the equipment you need. However, by renting equipment instead of buying, you’ll be able to save that large sum and put it toward something more important, such as advertising or product investments. Additionally, if you find yourself in a crunch for money, you can always end the rentals for a few months, something you can’t do when you own the equipment.
Account for Seasonal Trends
Unfortunately, there are certain times of the year when business might not be booming. These seasonal fluctuations might drain your income, especially if you’ve invested in a lot of product or inventory. If this happens, try to wait it out. Don’t lay off employees, as this will only end up costing you more when it comes time to recruit new workers.
Keep Track of Expenditures in a Spreadsheet
You should always have a good idea of how much income you have and how much you are investing. One simple way to track these numbers is through a basic spreadsheet. Make a note of what money comes in, what money goes out, and how much money you have left at the end of the month. This will help you to plan for the future and get an idea of just how profitable your business can end up being.
Improve Your Payroll System
Many small businesses end up wasting a lot of money on expensive payroll options. If your payroll system is so convoluted that you are thinking of hiring more HR staff to handle it, you might want to consider another option. Business check printing can be an easy, affordable solution for accounting and payroll issues. This will free up your staff for more urgent issues and prevent you from wasting time making sure people are being paid correctly.
No one knows when an emergency might happen, which is what makes them so devastating to new businesses. That’s why it’s so important for you to have an emergency cash fund to try and cover any unanticipated blows. Whether it’s unhappy customers who are causing you to lose sales or a flood that destroys your office, you have to be prepared and have a plan in place for these scenarios. Otherwise, you risk spending too much income to fix the problem.
There’s no foolproof method for making your startup a success. However, by paying closer attention to where your money is going and how much is coming in, you’ll be able to manage your next moves efficiently to help your startup thrive.
How do you manage cashflow in your startup?
Photo courtesy of: Picography
Latest posts by Kayla Sloan (see all)
- Do’s and Don’ts for the First Time Budgeter - January 15, 2018
- Walk Your Way to Financial Freedom with this Simple Side Hustle - January 11, 2018
- 3 Tips to Help Prevent Identity Theft - January 8, 2018