Recently, Simple Startup shared tips for improving your startup financial strategy with The Food Mint’s blog, Real Food MBA. You can read a sneak peek of the tips below and then head to Real Food MBA for the full article.
5 Tips To Improve Your Startup Financial Strategy
Startup entrepreneurs are like a mash-up between Indiana Jones and Macgyver. They’re huge risk-takers, they’re innovative, they can make something out of nothing, and they’re basically up to any challenge. And even further still, everyone is rooting for them!
The one thing startup entrepreneurs, Indiana Jones, and Macgyver don’t have in common are that they don’t always survive at the end of the day. Nearly 50% of startups fail in their first five years of operation. 50% is not a happy number.
If you look into why this high failure rate occurs, scaling too quickly, lack of product-market fit, and financial problems top the list. Better financial planning to ensure that a more sustainable business model is in place is an easy way to ensure that your startup stands a chance of making it.
In today’s post, we’ll cover 5 tips to improve your business’s financial strategy. Sound financial management begins with building a financial model and extends to keeping your books clean from the start, making numbers-based decisions, preparing for the unexpected, and embracing change.
Tip 1: Build a Financial Model (and Monitor It)
Building a financial model is foundational to improving your financial strategy. Beyond having access to the model itself, a tool that will enable you to run scenarios, test and adjust your business strategy, and forecast for the future, the process of building the model itself is an educational opportunity.
Tip 2: Keep Your Books Clean from the Start
Yes, there are some things that make sense to DIY for your business, like painting your office. It can save you money and is fun (if you like that kind of thing), but at the same time, it is super low risk. I’m just going to say it, your business’s accounting is best left to a professional accountant. DIY accounting is NOT low risk and most people don’t find it very fun either.
The margin of error when it comes to a business’s finances is not big. Accurate numbers give you visibility into your company’s health and are absolutely necessary for applying for a business loan, pitching to investors, raising capital, managing business taxes, and allocating resources. Get your numbers right.
To learn tips 3, 4, and 5, read the full article originally posted on www.realfoodmba.com.