Business success is a combination of skills, management, knowledge and learning.
Learning being the most important one. An entrepreneur has to learn at a very fast pace in business and implement these learning for success in business. One of the key aspects of starting any business is to manage the finances. Many start ups often fail to manage or handle this key aspect and succumb to the chalanges in hand.
Here we are giving 5 easy to remember and the key tips for all start up enthusiast to manage this important aspect of their businesses.
1. Testing the idea- For all start ups the number 1 suggestion is not go full blown investment in business but to test the idea/product or service with a target audience which is other than friends and family.
Most often an innovator is so much love with his idea that they often ignore the practical testing of their business.
2. Test run mode: Run the business in test run mode and not a full commercial mode for initial first 50 clients.
With this what we really intent to do is to avoid any formal registration and compliance cost. For all these compliance in all countries there are minimum threshold sales which you need to achieve before you need to mandatorily register your business as per local laws. Unless you have your first 50 clients and 50% of those are repeated clients, do not hurry to pay for that compliance registration.
The thing with compliance is that it is not only one-time payment you need to incur a repetitive recurring cost of hiring a consultant to fulfil a periodic requirement.
3. Minimised Fixed expenses. Do not comitt fix expenses for your start up initialy .
Use the variable and flexible options initialy. For example , use an e-office or a coffee shop initially than investing in office or committing for fixed rentals.
Hire equipements than buying. Use freelancers than hiring staff and committing to monthly salaries.
4. Credit advantage. This one is commonly used is most businesses and is largely dependent on negotiation skills of the owners.
Take maximum credit on your expenses or purchases and try to get advance from your buyers/clients.
It is a double work to manage the cash flow, but good negotiators with reasonable people management skills have proven to get the best results in their capacity.
5. Plan everything- Planning is important thing . Often entrepreneurs feel that every aspect of their business is written in their mind, but it is seen that a well written plan made best thinkers also think again specially on finances.
When you plan write about the operations and the finances to manage those operations. Once you know the kind of amount you need to run the business for next minimum 2 years , you will figure out the ways to arrange for finances as well.
While all these tips are important to keep you on the top of your business, one of the most important tip is to be on the top of business and believe in your idea.
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