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Expert Answers to Biz Questions

Listen in! Pick up some expert advice to a reader's question that we selected from CyberSchmooz.

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5 Budgeting Tips Your Startup Needs

 

There’s no arguing the fact that you’ve already put a lot of time, money, and effort into your startup (not to mention sweat, tears, and maybe a little bit of blood). With so many startups failing within their first two years, usually due to running out of money, knowing the best money-saving tips and tricks is critical.

 

Improving your cash flow should always be a priority, which is why we wanted to share a few budgeting tips with you.

 

1. Set a Budget

While it may seem like common sense, a lot of startups tend to forget this one. Numerous startups rely on professional wealth management services to assist with this. However, if you’re a new startup and can’t afford wealth management services, it’s important to take matters into your own hands and compile a list of your expected income and expenses in order to gain a clear view of your business’s financial situation.

 

Depending on the sector your startup is in, your list may include things like office space, utilities, down payments, an e-commerce site, staffing, office equipment, and other upfront expenses. After you’ve compiled a realistic and accurate list, you can then review what can be cut and what can wait and be excluded completely. Then, you can create a budget that is realistic and has the potential to help you maintain profitability.

 

2. Only Spend What You HAVE To

After you’ve set a budget and determined what is absolutely necessary, what is desired, and what can be put off for a while, you need to prioritize your expenses and stick to it. Does the company have to commission an app right away, or can it wait? Though you want it, does social media advertising make sense at this point? How much should be spent on the company website?

 

Prioritizing expenses and only shelling out funds that are absolutely necessary at this stage is going to be paramount to the success of your budgeting.

 

3. Investigate All Potential Income Sources

To help ensure that you’re able to have the necessary cash on hand for a successful launch, you should consider your small business loan options. Whether you’re looking for financing for a convenience store or a new startup, there are numerous lending options that are affordable for small businesses, and you should at least investigate to determine if a loan is a viable option.

 

Another source of potential income that many startups have been successful with is crowdfunding or individual investors. While you should definitely stay away from maxing out your personal or business credit cards to fund your startup, loans and investments are possible ways to fund your new venture.

 

4. Get Creative on Staffing

Until the company is on firm ground and moving fairly smoothly, you should keep full-time employee hiring to a bare minimum. Those positions that are core to the business should be first of course, but there are options for other positions.

 

Can you or management handle the specified workload without hiring for now? If not, consider hiring part-time work-from-home employees, freelance or contract workers, or even outsourcing certain repetitive tasks such as payroll, inventory, bookkeeping, etc.

 

5. Get Creative on Spending

Finally, when it comes to startup tips, this list would be incomplete without including ways to save money on office equipment. Instead of shelling out big bucks for the latest computers and printers, look into leasing or purchasing second-hand items.

 

Peruse listings and check out surplus sales, auctions, and estate sales, plus be sure to visit local consignment and thrift stores for possible deals on necessary supplies and equipment. This way, you can obtain a lot of the necessities and save money for use elsewhere in the budget.

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