If you’re in the beginning stages of launching a new business, you probably have received lots of advice and information on the do’s and don’ts when it comes to finances.
In fact, you may have too much information. As an entrepreneur, you know there are hurdles and roadblocks to overcome and money can be tight before you get up to speed at full capacity.
So, it is crucial that you take a step back from moving at lightning speed to determine whether you are making smart financial choices.
Stay on top of cash flow and spending
Running out of money is one reason that new businesses fail. It can be a very dangerous position for a new business owner not to fully understand where every dollar is going. Taking a conservative approach is key. Expenses like a high-end office or top-of-the-line technology can be poor choices in the beginning stages of a business. Understand every detail about your expenses with most capital going toward the growth of the business.
Separate your money
When you are starting out a business, it can be easy to keep the money for your business in the same places as your personal assets. If you do not keep assets entirely separate, business and personal expenses can merge into the same pool of money. When this happens, you can’t accurately keep track of your business finances and expenses. Having a business account is not only helpful to you but adds credibility with customers and for future loan opportunities.
Be SMART. Set goals
Entrepreneurs have vision and determination, among other desirable high-achieving characteristics. Goals that are SMART – Simple, Measurable, Achievable, Realistic and Timely will help stay on track, but will also allow for any flexibility needed along the way. Setting even smaller weekly goals can be big confidence boosters to keep moving in the right direction.
Time really is money
It can be easy to get sidetracked and spend time on tasks that would be better delegated to employees. If you’re thinking that hiring help is costly, consider how much money you could be making if you focus on what you do best for business growth. While taking on a range of roles sounds like a productive and money-saving move, it can actually cause four times more mistakes and cost you more than hiring expenses. Hire like-minded, skilled employees to enable you to accomplish more, and do so efficiently and faster.
Continue learning and consult financial professionals
As an entrepreneur, you have a lot on your plate and it can be overwhelming. Ongoing education is absolutely necessary when it comes to entrepreneurship, as business needs and the environment evolve. Although finding the time to stay on top of tax laws, investments, insurance and more can be challenging. The right financial team can help provide education, alleviate stress and avoid costly mistakes related to your current and future finances. Do not underestimate the importance of financial help for continued success.
Starting a business is an awesome adventure, but one that comes with risk and the unknown. While it is sensible to prepare for the worst possible outcome, remaining optimistic is important for financial, mental and emotional health. Consulting with a financial advisor can help to provide expertise during the uncertain first stages and help to set the course for those desirable productive and profitable years.
Bayntree Wealth Advisors provides comprehensive financial planning and wealth management. The Bayntree team specializes in all aspects of financial health, including retirement planning, risk management, investment advice, tax strategies, estate planning and insurance.
Bayntree does not provide specific legal or tax advice. Please consult with your tax advisor or legal professional for guidance with your individual situation.