When you are starting up your own company there are lots of things to consider. When you have settled on your brand name and logo, you might need to start hiring staff and find a premises to work from. That is already a lot to take on board and your to do list will get even bigger when you start to plan out marketing campaigns and establish a presence online.

 

One major thing that all new businesses need to keep a close eye on is the finances. The problem for some entrepreneurs is that they are not financially inclined or experienced in the matter of money management. While you might have a good grasp of basic math, that is very different from knowing how to run your business finances efficiently. That is why you need to make it a top priority to learn business finance skills.

 

With a whopping 96% of US businesses failing within 10 years, due in the main to running out of cash, you need to make sure you are in the 4% that make it work for the long term.

 

Money management tips for start-ups

 

Taking steps to manage your money as a new business will help you to progress and become established. Very often, it is simply running out of money that shuts new businesses down. Following the advice below should help prevent that happening.

 

• Keep an eye on expenses and costs – whether you do it yourself or have a member of staff to help, managing your costs is very important. This will help you to budget properly to avoid running out of money along with helping you see where you are spending your cash. Very often, it is handy to split costs into fixed (i.e. those that occur each month like rent for your commercial premises) and variable (i.e. those that can change each month or be one-off costs). Take care to get the best deal on fixed costs and not overspend on them wildly. Expenses are one area within variable costs that should be managed carefully to avoid any excess wastage.

 

• Keep some emergency cash back – another great money management tip for new start-ups is to always have some emergency funds available. Very often, this could be the difference between staying in business or going bust. As in normal life, there can be nasty surprises that crop up in business at times, from vital pieces of machinery needing to be replaced to your major client suddenly leaving you to go elsewhere. An emergency fund helps you to survive those sorts of setbacks and to carry on trading.

 

• Set clear business goals – if you want to really look after your money and also help your business grow, you need to have clear goals from the start. The problem for some businesses is that they either do not bother or set goals that are too easy or difficult to attain. Take the time to think about where your business could realistically go and set targets around this. That will help you to get a sense of the resources needed to get there and also to see the financial health of your business when goals are reviewed.

 

• Do not put image before profit – when some start-ups are being founded, the temptation can be to overspend on things that are not actually needed. A great example is renting an expensive office in the swankiest part of town when it is not necessary in a business sense. Or ordering staff the latest smartphones or PC’s to use when older models would enable them to do their job just as well. Be careful to only spend on what you need for your business and on resources that will return more than they cost.

 

Use an external company to help with financial planning

 

Most of what happens with effective money management for business revolves around proper financial planning. If you find this does not come easily then why not consider using a professional external organization to help instead? These companies can assist with financial planning and offer expert advice on managing your money successfully.

 

US-based Creative Planning has helped many start-ups and established businesses plan their finances effectively. Led by wealth management guru Peter Mallouk, they are able to help new entrepreneurs find the most efficient ways to manage their finances.

 

Effective money management for new businesses

 

If you are setting up a new business, then you may feel you need help with financial planning and money management. This is certainly a key business area to get a grip of as it will play a huge role in making your new business viable. If you are looking for some money management tips then the above should help. Once you have this in order, you can then start to build for the future and drive your new business to where it needs to go.