Advice For Start-Ups Struggling With Finance Management

Advice For Start-Ups Struggling With Finance Management

You cannot neglect the financial health of your startup business, especially during its first few years. The long-term success of your startup depends on how well you can manage finances. It would help if you made good financial decisions now so that you can be prepared when the eventual rough patches arise. Planning well now will also help you take advantage of profitable times and use that money to grow your business.

Get A Business Bank Account

Getting a business bank account is a key part of getting your startup's finances organized. It can be a savings account, checking account, or cash management account.

There are several benefits to having a separate account for your business. For example, it gets you ready for tax season. If you have your personal expenses and your business expenses separate, it is easier to file taxes. If you don’t do this, your personal and business expenses are going to be so intertwined that it may be difficult to separate them. This could lead to losing out on deductions.

Depending on your business's legal structure, having a separate bank account for your business can offer some legal protection. For example, if your business is sued, having a business bank account shows that your business is a separate entity apart from you. This makes it easier for you to protect your assets.

Finally, having a business bank account gives your business a professional look. It allows clients and customers to make payments to a business as opposed to paying you personally. This gives your entire venture the look and feel of professionalism.

Understand What You Know and What You Don’t Know

You may be an expert in your field of work. However, when it comes to finances, you may be illiterate. One of the biggest mistakes you can make during those early months and years of business is assuming that you know more than you do.

Get the tools and educational resources needed to understand how to manage business finances. It takes time, but it will save you money and stress in the long run. It is okay to say that you don’t understand something and ask for help.

Even if your startup has hired an accountant or is outsourcing its accounting services, you need to have a conversational understanding of the accounting principles that impact your business. If not, you could be bleeding money or have employees stealing money from you without realizing it.

For example, if your business uses instant credit card processing, you should understand how the credit card processing system works. For every credit card transaction, three entities are involved. These include the credit card association, the payment processor, and the customer's issuing bank.

The process of verifying customer information and authorizing or declining a transaction is relatively fast. However, it is complex. If it is not handled properly, it could mean that your organization is paying more money for credit card services than it should. However, if you take the time to understand this aspect of your business, you can have more control over how your money is spent.

Manage Your Cash Flow

Cash flow refers to the money that goes in and out of your business. If you make more money than you spend, your cash flow is positive. Unfortunately, more than 60 percent of small businesses struggle with cash flow. You must pay close attention to this aspect of your business.

Take control of your cash flow by making sure that you send invoices immediately. Keep track of your debts and savings. Don’t wait until you are in a dire situation to borrow money. Instead, borrow money before you need it. When possible, make tweaks in your inventory to improve cost efficiency. Also, evaluate business operations frequently to see where you can cut expenses.


Your time and money is valuable. The decisions that you make during the opening months and years of your startup will impact your business's growth and determine whether it fails or succeeds. Don’t let a lack of understanding prevent you from managing your finances. Instead, dedicate time and energy to learning about and maintaining the financial health of your business.

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