As you’re a new business owner, you will definitely face different big decisions almost every day. Who are the people you should hire? What exactly should your business logo look like? Where should you incorporate your brand and how should you do that? Apart from all these doubts, one of the million-dollar question is where will the startup money come from. Handling your initial funds is indeed critical, especially due to the fact that many entrepreneurs use their lifetime savings account to take the biggest decision of setting up their own business.
Although building a tech startup is not too hard, but it involves prior planning, dedication and making some right decisions based on the current technology and gadget news and requirements. Only having a successful business plan won’t be enough for you to start off with a profitable business. There are too many formalities that you have to take into account before setting up the business. Starting from the initial funds to the loans, the employees to hire, the accounting and bookkeeping decisions, everything needs to be done at once. What are the different financial tips that you have to take into account if you’re going to be a successful businessman from a startup? Check out some essential financial advice.
1. Devise an easy system of accounting: During the initial stage of the game, you won’t require too many “bells and whistles”. Rather you would want to set up a system which is user-friendly and which can grow with you. Most of the start-up businessmen use QuickBooks but there are many other options from which you can choose. One more thing to remember that is that it you should start accounting from the very beginning and not wait till a later date when later your finances become too complex.
2. Set your payment collection process: You can only enhance the cash collection process by establishing the account receivables process which you allow you to make a list of all invoices and balances. Ideally, wouldn’t you want to set up your credit guidelines and collection timeline before collecting the first payments? Choose to include some sort of perks for the customers who make early payments as part of their terms of purchase.
3. Set up a system for accounts payable: During the early stages, it is particularly vital to create a foundation for maximising your cash flow. Consider taking into account all your expenses so that you can think the way of recording and covering them. There are various tracking systems from which you can choose. You may even choose to work with a professional who can help you with the best advice on accounts receivables.
4. Start off by building your budget: Jot down your expenses and then subtract them from the revenue that you earn. Identify the resources which you will require in order to achieve each of the milestones that you’ve set. This process should be repetitive and you should rebalance your priorities once you meet each and every milestone. Look forward into vendor financing and be strategic about your marketing goals.
5. Don’t spend more than what you can: There are tendencies of overspending while hiring people. But you should avoid making this mistake initially as this will spoil your strategies and bust your budget as well. Hire only for those positions where you actually need someone and it is better to hire freelancers. As you won’t be able to offer too much cash, it is better to offer some other kinds of perks and incentives to attract the employees.
6. Know your tax liabilities: When you still did not start making revenue, taxes wouldn’t be much of a concern for you but as soon as you start earning revenue, taxes should be on your top priority list. It is best to hire a tax professional who can guide you about your tax obligations and the steps that you need to take to keep paying your taxes.
Therefore, if you wish to set up your tech-start up, the above mentioned points are some of the financial tips that you need to follow. Being appropriate about your finance will lead to an effortless progress for your startup business.
