Personal Finance Tips For Startup Entrepreneurs
Many people say that money is a secondary thing while starting a business. It is your idea, commitment, and planning that takes you miles. They might be right to a certain extent. But, we cannot deny that starting a business requires money! No matter how much you are investing in your business, you need to plan the finances and prepare for the rainy days. In this article, I am going to share 7 personal finance tips for startup entrepreneurs that will make it ten times easier for you to manage your finances.
#1 Do not quit your job already
Take the risks, they say. Be fearless they say! But we do not have to listen to such advice. Being an entrepreneur does not mean that you have to start taking risks from day one. It is always better to be continuing that job for a while than to be in debt. Moreover, having a fixed income in your bank account every month will help you in paying your bills, the school fee of your children, and your day-to-day expenses.
If risks are one of the aspects of starting a business, so is patience. You must wait until your business starts making profits or requires your attention 24/7.
#2 Manage your cash flow
If you are someone who has no idea where your salary goes after a month, you need this advice the most. First of all, you have to learn to manage the cash flow through your bank accounts. You need to check where you are spending all your money and how much money you are saving. Start making lists or create a Google spreadsheet to track your monthly expenses.
Well, that is just the organization part. Now, once you have gained insight into your money flow, it is time to create budgets and cut down your expenses. Maybe you are eating food from outside too much. Maybe you are shopping impulsively. Track every spending of yours. After all, you need money for your startup.
#3 Set some goals
You want to make profits with your startup. But how are you going to achieve that goal? You have to identify the steps in between. Whether it be cutting off costs, setting a separate savings account, or automating your bill payments, you have to organize your financial system.
You can categorize your goals such as cash flow management goals, business expansion goals, profitability goals, and so on. Think of what you desire from your startup money-wise and then set a goal for yourself. But, that is not enough, you have to create a plan to achieve those goals too!
#4 Do not over-invest
You decide to start a business. You have a nice idea that needs implementation. The next thing you decide to do is rent an office, spend on stationery, hire people without thinking it through or you may just go and get a loan for your business. Well, I would say step back and take a deep breath. You do not need to invest money in everything all of a sudden.
First, focus on implementing your idea, launching your product, and earning some profits or at least finding some customers. Then, slowly expand your wings and get ready for a flight! In other words, invest wisely and only in important things in the early days of your startup.
#5 Cut down your personal finances
I have already given a hint about it in tip number 2. If you want to avoid getting into debt and running a successful startup then you have to make certain sacrifices in your personal finance section for some time. This could mean the following:
- Canceling all your unwanted subscriptions and memberships
- Cooking food more at home and eating out less
- Budgeting on electricity, gas, and other bills
- Avoid having coffee at Starbucks for some time and brew it at home
- Stop shopping impulsively, start creating shopping lists
Think of some of the ways you can cut down your personal expenses and utilize that money in your business. This way you would not have to borrow money from anywhere else.
#6 Involve your family
Do you know what is the reason behind a successful startup? It is the unconditional love and support that our family has to offer to us. So include them in your dream and dream bigger! Make them aware of your financial situation, whether it is just you and your partner or whether you have kids. Ask them to contribute at their ends by cutting down their expenses for a while. You can set budgets for everyone in the family. You can also have a monthly family meeting where you can check on each other’s financial goals, decide budgets and extend support.
Diana, who provides academic assignment help in Australia shared her experience with us. She told us that every month her whole family sits together and they mention the upcoming financial requirements. This makes it much easier for her and her husband to map out their expenses.
#7 Always keep an emergency fund
No matter how well you plan everything, there can always be sudden cash requirements. What if any member of your family falls sick? What if your car breaks down? What if you have to take your dog to the vet? Any situation might arise at any time in our lives. So, we should have an emergency fund to tackle the costs. Justin, who works as a finance assignment help expert in Perth says that even most financial consultants advise their clients to save for emergencies. One may keep a separate bank account for that to separate their finances but one must stay prepared for the unexpected. After all, having some extra cash in your bank accounts never hurts!
Starting a business could be filled with challenges. But, if you plan your finances from the beginning, you are saving yourself from at least one of them. So start creating finance goals for your startup, manage your cash flow, cut down your expenses, and involve your family in this wonderful journey of being a successful entrepreneur. You must also keep an emergency fund for Last but notleast, have a certain source of income until your business is fully set up. Hope this article helps you in managing your finances while you start your business.
Mustafa Al Mahmud is the Founder and CEO of Gizmo Concept and also a professional Blogger, SEO Professional as well as Entrepreneur. He loves to travel and enjoy his free moment with family members and friends.