{"id":4210,"date":"2019-11-20T12:07:57","date_gmt":"2019-11-20T10:07:57","guid":{"rendered":"https:\/\/www.dazzlepop.net\/site\/?p=4210"},"modified":"2020-03-21T22:09:48","modified_gmt":"2020-03-21T20:09:48","slug":"everything-you-need-to-know-about-finances-for-your-startup","status":"publish","type":"post","link":"https:\/\/www.dazzlepop.net\/site\/everything-you-need-to-know-about-finances-for-your-startup\/","title":{"rendered":"Everything You Need to Know About Finances for Your Startup"},"content":{"rendered":"
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Everything You Need to Know About Finances for Your Startup<\/p>\n\n\n\n

Getting a startup <\/a>off the ground isn\u2019t easy. Instead of focusing solely on your baby, as in the actual product or service that you\u2019re selling, you\u2019ll also have to deal with administrative headaches. Managing your startup finances is one of these necessary evils. Here\u2019s everything you need to know about\u00a0finances for your startup<\/a>.<\/p>\n\n\n\n

As a business owner, you\u2019re going to have to get involved with the financial side of things. There are no two ways about it. Here\u2019s what you need to know to steer your company\u2019s finances<\/a> in the right direction.<\/p>\n\n\n\n

Manage Your Finances <\/strong><\/h2>\n\n\n\n

Entrepreneurs <\/a>will generally do\u00a0everything\u00a0<\/em>except manage their finances<\/a>\u00a0properly. Making money is obviously a major concern and often a big driver in starting the business, but actually taking care of the\u00a0day to day finances<\/a>\u00a0tends to take a backseat. And that\u2019s a recipe for disaster.<\/p>\n\n\n\n

Managing your finances should be one of your top priorities<\/a>. No \u201cWe need to focus on our product,\u201d no, \u201cI\u2019m not a money person,\u201d or \u201cWe\u2019ll figure out the finer details later.\u201d In short, no excuses. <\/em>Manage your cash or you\u2019ll go out of business<\/a>, period.<\/p>\n\n\n\n

Your Accountant is Important<\/strong><\/h2>\n\n\n\n

I\u2019ve already emphasized that managing your money<\/a> is super important. <\/em>Accountancy deserves its own headline, as it\u2019s the crux around which your financial health will be measured. Without it, your paperwork will be a mess, the IRS will start sending you threatening letters, and you won\u2019t have a clue about how much money you really <\/em>have.<\/p>\n\n\n\n

Of course, a startup doesn\u2019t always have the cash reserves to spend money on a fancy (and generally quite expensive) accountant. In the beginning, you\u2019ll be able to do it in-house. You\u2019ll need to brush up on your skills, however, and a course that covers the accountancy essentials should be plenty for Year one, either for yourself or for one of your designated employees. Once your numbers start getting a bit more complicated, hire a pro.<\/p>\n\n\n\n

Expensive Credit = Big No No <\/strong><\/h2>\n\n\n\n

You\u2019re just starting out, which means you need money. And quickly. Trust me, as a former small business owner, I get it<\/em>. When banks and credit card companies start sending you leaflets offering you a bunch of money and all you need to do is fill in a form, it\u2019s easy to fall prey to temptation.<\/p>\n\n\n\n

I\u2019m going to spell it out with some big letters (just to put some extra emphasis and also to be slightly annoying): NEVER GO FOR EXPENSIVE CREDIT.  It\u2019ll (almost always) end in tears. If you\u2019re relying on credit to get your business off the ground, you\u2019ll likely run out of money before you can start paying it back.<\/p>\n\n\n\n

Keep Your Expenses Low<\/strong><\/h2>\n\n\n\n

Working out of your basement or getting a cool office? Hiring a battalion of employees or working 18-hour days and hiring freelancers? Logo designed by expensive hipsters or something you got off Fiverr?<\/p>\n\n\n\n

These are choices you\u2019ll be faced with, and while I\u2019m not saying you should cut corners at every <\/em>opportunity, keeping costs low, to begin with, are key to survival. You don\u2019t want to burn through your finances in the first few months, nor do you want to get saddled with long-term contracts you can\u2019t get out of. Spend money when you need to, but don\u2019t be frivolous.<\/p>\n\n\n\n

Don\u2019t Merge Personal and Business <\/strong><\/h2>\n\n\n\n

There\u2019s business, and then there\u2019s personal. They always say you should never mix the two, and \u2018they\u2019 are right. When you launch your startup, you\u2019ll need a commercial bank account. For any business expenses, use this account only. <\/em><\/p>\n\n\n\n

Never, ever, <\/em>use your personal bank account to cover any expenses. Even if it\u2019s a short bridging loan or a matter of convenience. There are simple reasons for this:<\/p>\n\n\n\n

1) You won\u2019t be tempted to make it a regular occurrence and
2) It makes doing your taxes a lot more straightforward.<\/p>\n\n\n\n

Know Your Tax Deductions <\/strong><\/h2>\n\n\n\n

Tax deductions can seriously lower your expenses. You should know them inside out, or hire an expert who does. You\u2019ll be surprised by the type of things you can include:<\/p>\n\n\n\n

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Everything You Need to Know About Finances for Your Startup<\/figcaption><\/figure>\n\n\n\n