Almost half the US population lives paycheck to paycheck. As an entrepreneur, you can’t take things that casually; can you? Money makes you work hard when you read on the path of entrepreneurship, and unless you learn the art of managing it, you will continue your strife. Whether you’re bootstrapping your startup business are preparing for a growth phase, money management is what will keep you afloat. Here are some time tested and proven effective tips.
Catalog Your Costs – All of Them
It’s too difficult to manually track where your business’ money goes. Don’t even attempt it. Instead, start cataloging all your costs in a business dashboard application. Record all your expenses in the database, and categorize it.
Slowly, you start getting bird’s eye as well as deep and probing view of your expenses. This helps you focus on cost cutting where there’s scope and where it actually matters (example, switching to a better credit card, as compared to selling off your office coffee vending machine).
Improve Your Credit Score
Not many young entrepreneurs realize that their business’ debt-worthiness is often linked to their personal credit score. A recent MoneyTips survey showcased that nearly 30% people don’t know their credit score. Considering how it’s a major factor that will determine the ease with which you get debt financing, it’s surprising! You can do better; start by repairing your credit score. Get free credit reports, sift through them to identify your credit problems, start organizing your credit card usage, and set up automatic bill payments to avoid defaults.
Have Plan A. B, and C To Meet Your Startup Financing Needs
If you believe in your business model, it’s not worth underselling your equity to raise money. Debt, however, is hard to come by for entry level businesses and startups. Don’t pin your hopes on the neighborhood bank. Instead, mobilize alternative channels of financing. Loanable is a good start; it’s an online lending platform where you can float your request for a bridging, secured, or short term loan, and get super quick approval (less than a day in most cases).
Challenge Your Expenses
Entrepreneurs cringe at the thought of cutting back on expenses, and understandably so. However, the art of challenging ones expenses yields almost immediate and significant results. Here are some options and examples:
- Look for co-working spaces instead of leasing or buying fixed space
- Hire contractors, virtual assistants, and freelancers when you can, instead of hiring permanent employees
- Join a purchasing co-operative to get significant discounts on office supplies
- Keep on negotiating for your recurring expenses (rented space, rented equipment, etc.)
- Print free business cards; use free storage space on cloud platforms, buy refurbished laptops and business phones
- Build a free website using a platform like Wix or Weebly
Money is greasy; it can slip out and slip away before you realize it. Instead, work on your hold, with these money management tips and tricks.