These are hard economic times for a lot of people. Businesses everywhere are closing down each day. Interest rates on business loans are historically low. Marketing has never been more affordable. The talent pool is better than ever before.
Each of these statements is true. When it comes down to it, there is no perfect time to start a business, and it will always be challenging (as anything worth doing will be). Therefore, if you have an entrepreneurial dream, now is as good a time as any to get it off the ground.
If you’re not quite ready to launch a business, going back to school could still help you advance your dream. Earning an online business degree will help you to develop your business acumen and credentials, no matter what program you choose.
If you feel like you are personally ready to start your business, it’s important to come at it with the right approach. One of the biggest challenges that many entrepreneurs face is obtaining and managing the funds that keep their business thriving. From working with consulting services like Prepare 4 VC to creating a budget to boosting profits, here are some practical tips for managing your startup capital:
Pursue the right kind of funding
First of all, if you plan on seeking funding, and most new businesses do, make sure you are strategic in the path you take. You don’t want to commit to something that will hang over your head because you are unable to pay the money back. Asking friends and family for contributions, starting a crowdfunding campaign, and trading your services for office space and other necessities are all great options to consider.
If you have a solid business plan and are confident in your ability to pay back funding in the near future, then you might consider other forms of financial assistance. For example, you may qualify for a government or non-government small business grant, you could take out a bank loan, or you could explore your options with venture capitalists or angel investors.
Make a budget
Perhaps the simplest method for managing your money as a new business is to create a budget. This will allow you to view all of your monthly expenses in one place. Combining those expenses with your expected revenue will show you where your business stands financially. It’s essential that you and your team develop a realistic budget and stick with it. And be sure to prioritize all of your business loan payments, accounts payable, credit card payments, and other essential bills so that you don’t fall behind and accrue interest and late fees.
Monitor your spending
A big part of maintaining your budget will be to watch every dollar you spend. This means avoiding frivolous expenses. In the most basic sense, you should only make a purchase or investment if it improves your company’s chances of success. Boosting your marketing, hiring a web designer, investing in product development, and working with a consulting agency are examples of spending that can quickly pay off.
Cut frills, boost revenue
Once you have a workable budget and figure out how to monitor your spending, it’s time to make the necessary cuts. This includes any frills, whether it’s a costly decoration for your office or working with an overpriced vendor. At the same time, you’ll want to find ways to increase revenue. Common ways that small businesses accomplish this are by introducing new products, running promotions on email and social media, and rewarding customers who refer their friends.
You may be questioning whether you should launch that business you’ve been dreaming about. However, while it’s a tough time for the economy, you can set your business up to thrive now and in the future if you manage your money well. Along with implementing the tips here, consider working with a consultant who can help you maintain a solid financial standing.
Guest post from Marcus Lansky of Abilator.biz