Last Updated on Mar 25, 2020 by James W
Here at Make Money In Life, we’re dedicated to helping you reach your ultimate earning potential. For many, that means starting a business, and taking control of their future. Creating a startup company is the best way to unlock unlimited earning potential. It gives you the kind of money that a salaried job never will. Unfortunately, a vast proportion of new businesses don’t even make it past their first or second birthday.
The biggest reason for business failure is mismanagement of money. Those first two years are crucial when it comes to laying a strong foundation for the future. Budgets are tight and capital is limited. So, it’s what you do with these limited funds that really matters.
Here’s the thing. If you can make your business work on a shoestring budget. It will work as a million dollar corporation too. Ready to learn the frugal startup bible?
Keep your accounts in order
Your money won’t manage itself! For those first few months, you need to keep an eagle eye on your finances. You need to account for every penny, because it could mean the difference between success and failure. If you’re the kind of person who runs a messy Excel spreadsheet, it’s time for a change. Invest in a decent piece of business accounting software. It’s not expensive, and it will keep your day-to-day books in perfect order.
Have a strict plan for monetisation
Many of the biggest businesses fail because they’re not thinking about return on investment. Too many tech startups have found their way without a monetisation strategy. Facebook, Twitter, and Instagram all blew up before they put a monetisation strategy in place. What followed is an enormous number of companies with a poor attitude. They just assume they’ll grow exponentially and figure out how to monetise later. Just because it worked for Facebook, doesn’t mean it will work for you. Monetise now.
Keep your expenses low
This piece of advice goes without saying, but make it your mantra. As a small business, it’s easy to get carried away with your expenses. Maybe you’ll pay a web designer for a new website. Perhaps you’ll hire copywriters, a video producer, a marketing team, and a distributor. Do you really need to spend that money? Take on simple tasks yourself, and only pay out what’s absolutely necessary. Focus on the core idea, and the rest will come.
Don’t seek investment too early
We see it happen all the time. Startups run out of money, so they start pitching to angel investors. As a startup consultant, we only advise seeking out investment when your company is profitable. Pitching to investors while before that point puts you in a poor negotiating position. You’ll give away too much of your company for a lifeboat. This isn’t the right route for any company. Spend the time building the company yourself first.
Follow these simple money tips and you’ll keep your startup above water for those crucial first years. From there, you can build the company into a multi-million empire! Good luck!