Money is not an easy thing to manage in an individuals day to day life, let alone as a startup company that has a lot of expenses and little way to make the money back on their investment. Infrastructure in business takes time to develop, and startup costs are extensive and expensive.
The overhead that is associated with securing a building, paying for utilities, permits, patents, employees, and many of the other hidden costs of business makes it so it’s extremely challenging for a startup to stay in the black, or at least get there in a short amount of time.
The majority of business owners are securing loans in order to start their business in the first place. This automatically puts them in the red, and too many aren’t able to recoup financially and end up having to look into the details of bankruptcy. It’s a natural occurrence for business, as new research shows that up to 96 percent of businesses fail in 10 years. The reason behind this shocking statistic? Cash flow.
If you’re a startup business not wanting to be a part of the 96 percent statistic, here are some things you should be doing to stay in the black and therefore, in business:
Hire the Right Help
Obviously employees are very important to the success of a business, but we’re focusing more on help in regards to finances and business planning. If you’re an entrepreneur just starting out, don’t be afraid to hire some very highly recommended advisors. Learning from the best who have already learned the hard way about what not to do will save you and your company money in the long run.
Just as you should hire the right advisor in the strategy department, it’s also crucial that you find a brilliant accountant and financial advisor. Money is basically the only reason businesses fail, so you need somebody hitting you over the head if you spend too much in one particular department.
Be in the Room With Said Help
When you hire anyone, make sure that you’re keeping eyes on what they’re doing. Don’t be the one who is a control freak and breathing down everyone’s necks, but keep your eyes and ears open. With your employees you can leave this duty to managers, but in regards to your accountants and people who have anything to do with the financials, be in constant contact and make sure you’re signing all of the checks going out.
When you know exactly how much money is going out, you’ll be able to reign in any unnecessary spending that accounts for the failure of most businesses.