How to stay above water while your business is growing
Being an entrepreneur means being excited about the prospects of new ideas, products, and businesses. Entrepreneurs spend a lot of time finding and securing funding for new ventures, and then dive right into infrastructure, marketing and selling; but too often, good money management practices are neglected or outright forgotten. Many a failed venture need only look back on cash flow issues that were evident from the onset of operations. Here are some ideas to make sure you are properly managing your money.
1.Have a grown-up in charge of your budget
If you’ve been in the game for a while, you know the importance of having a solid business plan, and you know how much weight rests on the financial planning portions of that plan. Before they start their business, most people have a general idea of what your finances will be, but you might not realize all of the expenses that you or your business will need to stay afloat. Brand-new startups should have weekly budget assessments, that can gradually stretch into monthly and quarterly meetings—but if you know that you’re not detail-oriented enough to make it happen, find someone who is. There must be at least one person in your organization whose primary focus is asking “Where’s the money coming from?”
2. Size matters
You’re not an entrepreneur because you think small; but not every startup company will be bought up in the first year by a giant software company, so you might not be a multi-millionaire as soon as you anticipated. Be smart, and use your company’s small size to your advantage. A small company is better able to adapt to shifting market trends, and if you’ve got your ear to the tracks you’ll be able to see those changes coming, and plan quickly to take advantage. Growing large quickly simply to get noticed won’t benefit you, your investors, or your clients. Keep operations tight and efficient and in time everyone will be thanking you for your smart business planning.
3. Accountable accounting
One of the biggest mistakes small businesses can make is outsourcing too much, too quickly. Some things are better kept in-house, and accounting is one of them. Even if funds are tight, and you can only hire an accountant part time or on a contract basis, do this instead of farming that service to an outside company. Having someone that is intimately aware of your business, who you can talk to any time you need to, will be invaluable. Utilize free money management services and applications from Mint, Google, your bank and others to keep you on top of your finances.
4. Tech Savvy
Being tech-savvy can not only help you save money in operation expenses, but keep you aware of your money-management issues as well. Small businesses can easily operate with small and efficient computer, network, and other telecommunication solutions. The more educated you are on the availability of money management tools, online financial services, and free or low-cost communication devices and plans, the more you can do yourselves, and the better you’ll be positioned to keep a positive cash flow.
While you should be devoted to creating the best product, service, or model possible for your business you should always have your finances in the back of your mind guiding every decision you make. A great way to make sure you’re making your decisions on accurate numbers is by loading up your smart phone or tablet with some free financial apps that can be linked to your credit cards and bank accounts. Use them to stay on top of bills and to coordinate with your accountant in your weekly planning meetings.
Aimee Watts is a staff writer for Mobile Moo. She has spent ten years telecommuting full-time, and loves spreading tips and advice for fellow work-at-home parents. She loves gadgets, new ideas, and skiing with her two favorite people: her husband and teenage son. They live in Evergreen, Colorado.