Are you the owner of a start up business? Are you interested in learning how to improve your business financially? Read this list of financial tips for start up businesses.
Some simple tips that can greatly help your business. . .
- Figure out what your breakeven sales figure is – Determine fixed costs and variable costs. Can you generate enough sales to cover costs and make a profit?
- Price your service or product to make a profit, not break even. Don’t be afraid to make money – let your customers tell you your price is too high
- Get an accountant to set up your books and do your taxes – ongoing bookkeeping is a do it your self item, but the set up is not.
- Figure out how to generate and read financial statements – know the difference between a balance sheet and an income statement and review yours regularly
- Have sufficient capital to weather a sustained period of losses
- Have an exit strategy – for example, instead of getting a 5 year lease, get a one year (or shorter) lease with options to renew.
- Outsource the items that are outside of your area of expertise – no one can be an expert on everything
- If you operate in multiple states, you will be subject to tax in each state you have a presence in
- Contact state and local government business development offices for potential financing and guidance
- Get the right insurance – use a commercial broker who specializes in your industry
- Determine what your competitive advantage is – low cost, sole provider, new innovation, etc. Know who your competition is and how they price
- Ask vendors and suppliers for discounts and delayed payment terms.
- Have adequate separation of duties for internal control
- Reconcile your bank account monthly – check fraud is rampant
