Top 5 Financial Tips for First-Time Entrepreneurs

First-time entrepreneurs have too much in front of them to tackle, yet, the issue of finances always comes to the forefront. After all, without enough money, your company will run into the ground long before it reaches its full potential. If you’re not careful enough with your finances, this is exactly what’s going to happen. With that in mind and without further ado, here are five important financial tips for first-time entrepreneurs to help them bridge that rough patch of the first six months to one year in the business world.

Limiting Fixed Expenses

As soon as you start, you need to make sure you can keep your business afloat, and the most efficient way to do so is to limit the fixed expenses. The broadband plan you’ve signed up for always has a fixed cost, but you would be surprised at just how precise you can make your estimation of utilities, fleet management overhead, and supplies cost. At the end of the day, frugality is the name of the game, which is why you need to do your best to keep your expenses low and urge your employees to do the same.

Managing Cash Flow

The next thing worth keeping an eye out for is the cash flow. The initial investment money gets depleted fairly soon, but the operational costs still remain. Then, you need to innovate, offer incentives to customers (other than discounts), and pay bonuses to your employees in order to keep the morale high. The thing about cash is that, during the initial stage of your startup, it’ll be in short supply. Debts, subscriptions, fees, and interest rates will eat most of it, while the bulk of your profit might remain in invoices and account receivables. Therefore, you need to be extra careful when it comes to your management of those few resources you do have available.

Exploring Fundraising Options

The way in which you acquire the money for your startup will determine the way in which your company functions from that day on. Getting a partner means split control and going through preorder; a crowdfunding system implies that you already have some customers, while taking money from a relative may put your personal relationship in peril. All things considered, many first-time entrepreneurs tend to go with start up business loans. The reason behind this is mostly the fact that they aren’t required to present a business plan or a financial record (both of which would have been problematic for someone without previous experience).

Pay Your Bills Online

According to one survey, an average company spends $12 in order to pay a bill, while when paying through an online platform this amount can be brought down to as little as $1.50 per bill. In other words, you get to save about $10.50 per bill, which on monthly and yearly level comes down to a substantial amount. The sooner you start, the more money you stand to save.

Open Source Tools

Finally, one of the best ways to save money in your office is to go for open source tools. Open Office can be equally as efficient as MS Office. Nowadays, Google offers more than a few great alternatives to this expensive standard tool, as well. Aside from open source tools, certain free trials, demo versions, and free versions can also come in quite handy. Sure, some offer limited functionality, others have an expiry date but, for the time being, they save you money. Due to the fact that your first several months are a period when you’re supposed to save the most, there’s no reason for you not to do so.

First-time entrepreneurs meet many challenges on their path to success but with proper organizational abilities, enough research, and adequate advice it’s quite possible to make it on your first try. Apart from all the above-listed, it’s smart to hire services of a seasoned accountant, seeing as how this awaits you somewhere down the line. Never stop learning and always remain persistent and you give yourself a really fair shot at success!

Author Bio:

Diana Smith is a full time mom of two beautiful girls interested in topics related to finances and latest business technologies. In her free time she enjoys exercising and preparing healthy meals for her family. Follow Diana her on Twitter and Google+.

 

 

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