Financial Advice for Start-Ups

Frequently, I find that startup ventures simply do not have a financial plan. They know their business in and out but when you ask them about their financial methods of keeping track of operations, they look at you like you asked them how many planets are in the galaxy. 

Agreeing on a structure, having a plan, and making sure there are checks and balances can help mitigate a lot of issues in the near future. It is stated that approximately 80% of small business fail within their first year with the primary reason being the lack of cash. Here are a few suggestions to help keep your business from going under:

Credit cards, customer revenue, personal debt…. What is the best option?

Financing a company can be extremely difficult, but I suggest getting your company off the group with as little outside funding as possible. Look at starting your company with customer revenue, secure an early adopter and create your prototype or service based on the cash received from that customer.  Next, would be investing into your company personally, having started a few companies, our initial investment always came from the founding members so make sure that you can invest a little of your own. 

The next source of financing is whether or not to use credit cards… In some cases it might be difficult for a startup to acquire credit cards but can use personal cards as an option. Before you do, check out local city and state programs that can help extend grants, loans, or other sources of financing and lastly check out the US Small Business Administration website.  They have a variety of different resources that can help you get up and running. Business.gov is another government website aimed at helping Entrepreneurs across the country. There is a lot of useful information in regards to registering a company, applying for loans grants, and legal advice that can help you along your way.

Invoicing 

After determining how you’re going to finance your company, the next step is to keep track of your invoices. 

Here are a few solutions free or low cost solutions:

Billing Boss is a completely free online invoicing solution for you bootstrappers, but this comes at the expense of being limited to basic feature.

Another great service is Blinksale, which offers an unlimited number of clients, but limits the number of invoices through its various payment plans.

There are dozens of online services that provide help with invoicing, including but certainly not limited to: PayPal, Zoho, Simply Bill, Invotrak, CurdBee and Invoicera.

Keeping track and budgeting 

Every startup company must have an individual in charge of their finances, but more importantly they must a process to keep track of money in and out. 

Here are a few options: 

QuickBooks Online: you can pay customers, keep track of invoices, create reports, and have access via smartphones 

Sage Peachtree: an extremely user friendly software that was ranked #1 for ease of use and power by TopTenReviews

Microsoft Excel or Google Docs: this is the DYI method which can absolutely work as well but that means that you have to know what structure to use. Here are a few templates: Microsoft, DotXLS, and my favorite Free Excel Spreadsheets.

So remember to have a plan of collecting money, how to bill customers, and keeping track of where it is spent. 

If you have any other resources that can help, please share them below. 

If you have any other questions, send me an email or post a comment.

Ashkan

Ashkan [at] GreenhornConnect [dot] com 

photocredit: http://www.ewp.rpi.edu/hartford/library/images/coins.jpg