5 Focus Points For Improving Your Financial Stability As A Startup

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It is perhaps very obvious but it nonetheless bears repeating that the financial wellbeing and stability of a business will determine its future and whether or not it has one.

This goes for any enterprise but for startups, in particular, it’s true that taking your eye off the ball as far as your financial realities are concerned can be a critical mistake that takes an all-too-swift and telling toll.
With that in mind, here are some focus points well worth considering if you’re aiming to improve the overall financial stability and sustainability of your startup.

#1 Establish Clear Goals

Part of the appeal of starting up an entirely new business is the thrill and excitement of imagining where it might ultimately lead. Lofty ambitions are admirable in these contexts of course but it also pays to be practical and to set short and medium term goals that are realistically attainable.

Establishing clear goals for the foreseeable future can help you find the right focus during the all-important development phases in the life of a new business. Or to put it in rather more clichéd terms, it is worth remembering that Rome wasn’t built in a day and that even the longest journey begins with a single step.

#2 Do More Of What Works & Less Of What Doesn’t

This is a useful rule of thumb for any enterprise but certainly for startups which should have the flexibility and the enthusiasm to pursue with real purpose any fresh opportunities that emerge as time goes by.

It can often be that a startup will quickly become something quite different to what its founders had initially intended but this doesn’t need to be seen as a negative progression. Indeed, being smart and flexible enough to seize on unforeseen opportunities could be the difference between establishing sustainability as a startup and falling by the wayside.

#3 Only Borrow What You Need

Finding access to cash is typically a key part of the process involved in getting a startup idea off the ground but the aim should only be to borrow what you believe you need as a business and not simply to borrow as much as possible.

Limiting your debts in the earlier phases of your startup’s development can leave you with much better options down the line and give you a potentially crucial extra degree of financial flexibility when it really matters.

#4 Plan Out Your Finances As Precisely As Possible

Financial detail isn’t usually the sort of stuff that gets the creative energies up among startup founders but focussing on the numbers regularly and with real purpose can be the difference between success and failure in these contexts.

There’s certainly no doubt that putting in place realistic rather than optimistic financial plans for periods of three, six and 12 months can be an enormously helpful point of reference for anyone engaged in the business of creating a new company from scratch.

#5 Invoice Quickly & Pursue Late Layers

For startups and many larger companies as well there is a temptation to focus rather more on securing new sales than on invoicing swiftly and pursuing late payers. There is a good reason for this, of course, and securing fresh sales is essential to any company’s prospects and development.

However, it is also absolutely vital to establish good practices and proper procedures when it comes to invoicing and chasing payments as a startup because failing to do so can very easily lead to a cash flow crisis and potentially then a swift end to the life of your business.

Staying Ahead Of The Game

There are no guarantees of success in any business context but it’s no secret that failing to properly handle your finances as a startup is a recipe for certain disaster. A key aim in this context has to be staying one step ahead of the game wherever you can. By doing so when it comes to your finances as a startup you’ll considerably enhance your chances of avoiding major difficulties and there’s every chance you’ll also open the door to important new opportunities along the way.

 

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