Not long ago we covered the basics of getting your business idea off the ground. If you’ve managed to get that far with your business, that’s fantastic!
As a business owner myself, I’m very aware that cash is king. Without good money management practices in business, you can very quickly send yourself down the drain. So here are four of my tips for managing your money in the early stages of getting your business off the ground.
1. Know your numbers
When it comes to business you need to make sure you know where every dollar is coming from, and of course, where every dollar is going. Lack of cash flow, or completely running out of money, sends a lot of businesses out of business – try and remain organised by tracking your spending in a spreadsheet or with some easy-to-use accounting software such as Xero.
2. Limit the big stuff
To start a business, all you really need (depending on your business) is a minimum viable product. So try and avoid significant fixed costs at the beginning (like office space, that costs a lot in rent) or things that require a big upfront outlay (like a brand-new computer, if your current one still works) and instead focus your money on things that will help you grow. Generating money should be your priority, not spending it!
3. Have a backup plan
As hopeful as you’d like to be when you’re just starting a business, it’s important to be prepared for the worst. It might make sense for you to keep your full-time job and work on your business in your spare time to start, or perhaps still work just a few days a week in the beginning. That way, you’ll still have a steady income you can rely on. If you’re diving in head first, make sure you have savings behind you to cover your personal expenses as well as the business expenses – three months for both at a minimum.
4. Set financial goals!
As we always say here at WWC, setting SMART goals is key. If they’re Specific, Measurable, Achievable, Realistic and Time-bound (SMART) then you’re much more likely to achieve them. Set milestones you’d like to reach, say in your first three, six and 12 months, as well as goals for revenue that will keep you on track in the shorter term, say monthly, weekly or even daily.
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The information provided by Women with Cents is general in nature. It doesn’t take into account your objectives, personal financial situation or needs. Think of it as educational material in which to help you make more-informed decisions. We recommend you obtain financial, tax and credit advice specific to your situation before making any investments or financial decisions.
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