Loading
8 Financial Tips for Entrepreneurs Launching a Startup

8 Financial Tips for Entrepreneurs Launching a Startup


How to lay the foundation for a sustainable business.

If you are thinking of launching a startup, my hat goes off to you because it’s far from easy. Here are eight tips to help you avoid some of the common financial mistakes entrepreneurs make when starting a new business.

1. Cash flow management is key.

ost startups fail for a variety of reasons, but one is far more common than others -- running out of money. You need to know where every single dollar is coming from and where every single dollar is going.

If you don’t stay on top of your cash flow, you are going to put your business in a very dangerous position. It doesn’t matter how good your idea might be when you run out of money you hit a brick wall. Establish a budget and stick to it.

2. Track and monitor all spending.

With a new startup, there are going to be expenses coming at you from every direction. Hiring a full-time staffer to handle the books in the beginning isn’t very budget-friendly, so use accounting software to remain organized.

Not only will this help with cash flow management, but it also makes it much easier when tax time rolls around every year. As you grow and the accounting becomes more complex, you will need to consider hiring a professional.

3. Limit your fixed expenses in the beginning.

In the beginning stages of a startup, keeping your expenses low is the key to longevity. You don’t need a huge elaborate office in the heart of your city or fully catered meals three times a day.

Operate thin so you can allocate the majority of your capital to growth, which will enable you to one day implement any perk you want. Too many startups focus on the wrong things -- like fancy offices and over-the-top amenities -- and forget that generating revenue should be their top priority.

4. Remain optimistic but prepare for the worst.

You never know what can happen when starting a business, so it is best to prepare yourself for the worst possible situation. Don’t quit your job and eliminate your main source of income until your business can replace that income.

Keep reserves -- both personal and business -- in an emergency savings account. You can never be too prepared for bad situations. Sadly, they do happen, often when you least expect them. As an entrepreneur, you are responsible for your retirement, so when you start making money consider things like a Roth IRA and some investments, even small ones. Anything is better than nothing -- consider micro-investing opportunities or allocating funds on a monthly basis to an online platform like E*TRADE. I found their fees to be on the low side.

5. Every minute of your time has monetary value.

I’m going to keep this short and sweet: time is money.

Nothing has more monetary value than your time. You only get so much of it every day, so take that into consideration when you are planning your schedule and day-to-day duties. Every second you spend doing something unrelated to your business is time (and money) wasted.

6. Focus on customer acquisition.

Without customers, you have no business. The sooner you figure out how to acquire customers and scale, the greater the chances are of your company making it. Once you identify different acquisition channels, work on optimization to lower your costs.

It’s impossible to test every possible acquisition channel at first, both in terms of time required and cost, so focus on the most lucrative opportunities. Once you successfully scale those, you'll have the financial capability to explore other channels.

7. Make sure you pay yourself.

Your hard work and dedication to your business alone isn’t going to put food on your table -- you need to pay yourself. While you don’t need to compensate yourself with a big fat salary in the beginning, make sure you pay yourself enough to live.

Give yourself enough to live comfortably and focus on building your business. When you eliminate personal financial stress, it allows you to stay ultra-focused on your business. You can’t eat ramen noodles forever. Give yourself some padding and comfort.

8. Establish financial goals.

Rather than just say, “I want to build a multi-million dollar company,” you need to break financial goals down into reachable and measurable ones.

Monthly, weekly or even daily revenue goals allow you to stay on track and make the adjustments necessary for constant growth. You can even set milestones to hit along the way, giving you a lot of smaller goals to constantly hit. Knocking out little goals can give you the confidence needed to keep powering through the entrepreneurial journey.

Disclaimer: This post is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney or other financial professional to determine what may be best for your individual needs.

Expert Insights for Accounting & Financial Needs

Stay updated with CA Adda's blog for expert advice, accounting insights, and financial resources. Our team of 100+ experienced Chartered Accountants is available 24/7 to cater to all your individual, business, and organizational accounting needs.


Record 82,628 companies, LLPs incorporated between April and July: MCA

Record 82,628 companies, LLPs incorporated between April and July: MCA

As many as 82,628 companies and limited liability partnership (LLP) firms were incorporated on the l Read More

ITR Filing Rules: Good news for ITR filers, Income Tax Department started a big facility

ITR Filing Rules: Good news for ITR filers, Income Tax Department started a big

ITR Filing Rules: Many times due to non-availability of necessary documents, or due to non-updation, Read More

Income Tax Return or ITR forms for AY 2021-22 issued. Details here

Income Tax Return or ITR forms for AY 2021-22 issued. Details here

The Central Board of Direct Taxation (CBDT) has notified new income tax return forms — I Read More

Difference between GSTR-2A and GSTR-2B

Difference between GSTR-2A and GSTR-2B

Difference between GSTR-2A and GSTR-2B Read More

How to Register for GST India Online – Guide for GST Registration process Online

How to Register for GST India Online – Guide for GST Registration process Onli

This article will help you understand the basic process of GST Registration Every dealer whose annua Read More

Book Keeping Benefits

Book Keeping Benefits

Bookkeeping records offer benefits that help you make smart business decisions. With bookkeeping, yo Read More

Nidhi Company Rules, 2014

Nidhi Company Rules, 2014

Nidhi Rules, 2014 applies to every company which had been declared as a Nidhi or Mutual Benefit Soci Read More

Nidhi Company Registration - Keep These things in mind before starting Nidhi Company

Nidhi Company Registration - Keep These things in mind before starting Nidhi Com

Nidhi Company Registration is now no more costly, while making a profit from Nidhi Company is never Read More

Compliances of Private Limited Company

Compliances of Private Limited Company

The private limited company is amongst the most popular form of starting a business. Once your priv Read More

A Complete Guide to Private Limited Company

A Complete Guide to Private Limited Company

A Company is an association of persons who share common goals. Moreover, the owners of the company p Read More

Rules and regulations under one person company registration

Rules and regulations under one person company registration

The concept of One Person Company [OPC] is a new vehicle/form of business, which was introduced by T Read More

Non Governmental Organisation : Overview

Non Governmental Organisation : Overview

In India non profit organisations/ public charitable organisations (NGO) can be registered as Trust, Read More

One Person Company : Overview

One Person Company : Overview

The Companies Act, 2013 completely revolutionized corporate laws in India by introducing several new Read More

How to ensure new business setup in India

How to ensure new business setup in India

How to ensure new business setup in India Read More

CA ADDA PVT LTD is FIRST LARGEST ONLINE CLOUD BASED EASIEST PLATFORM to help you in all your individual, business & organization's accounting needs. CA ADDA PVT LTD having 100+ EXPERIENCED & SENIOR CHARTERED ACCOUNTANTS which are available for you 24 by 7 to take care of all your individual and business accounts requirement.