The most essential things you need to invest in your company are your time, creativity and money. You’re probably familiar with the phrase ‘you need to spend money to make money’, and to a degree this statement is correct. Even if you believe you have created a business model that requires very little capital, the chances are in one way another you still need to pay for the gas, electric and water you’re using as you run your office from home and your Wix subscription to fund your funky new website. All of these costs add up and take away from your profit potential.
The money side of your business starts with you being scrupulous with firstly how you attain your capital and secondly how you use it. The way you approach these two points could pave stepping stones to startup success or a dirt track to failure. If you look after and handle your business funds wisely, it could enable your business to flourish. The below two areas identify the opportunities available for raising money and how to monitor your business finances.
Raise Money
There are multiple pots of money available for your startup depending on your industry and circumstances. Such as government grants and bursaries, investors on crowdfunding websites, business credit cards, bank loans etc.
It’s handy to know you have options, but you need to backup your request with a show-stopping business plan that’s well thought out and appealing to the audience you’re trying to seek money from. And the work doesn’t stop there, you need to explain your calculations behind why you need a specific amount for your company too, which is where the next stage will help.
Every Penny Counts
Before or during the stage that your business plan is in motion, each possible and actual expense should be recorded and adapted throughout the life of your business. The purpose behind this is to; provide a breakdown of expected costs for lenders/investors, to establish whether you’re making a profit and to help you work out your tax calculations for HMRC.
So whether it’s packaging you’ve purchased to send items to customers or a new notepad you’ve picked up for your business illustrations keep a record and receipt of each and every outgoing. Alongside this be meticulous about each purchase and ensure you shop around for equipment and services to ensure you’re getting the best deals. For instance, you can research Mobile Phone Comparisons to save money on telecommunication, social media management services you’re using, and trial different advertisements to see what works for you. By keeping track of each penny, you will identify quickly if your business is profitable and whether you need to make changes to the business model or cuts in your budget to ensure your startup’s survival.
Managing the process of obtaining capital to invest in your business and assessing your income and outgoings is critical as you begin your new venture. By keeping a close eye over your company finances, this will prevent wasting money and allow this to be spent in areas of the business where it will help your business to grow.