From Zero to Profit: Financial Tips for Startup Business Owners

If you own or plan to own launch your startup business, financial advice is crucial. It will not only improve or stabilize your business, but it will also reduce the risk of failure. As a small business owner, you must keep a close eye on your financial future and plan ahead to ensure the long-term viability of your franchise.

Below are some tips to help your business grow.

Have a financial plan        
A financial plan is useful for determining whether your business idea is achievable. It will demonstrate the costs of running the business and how to finance them. Additionally, a financial plan is also useful for convincing financiers to lend you money,

Having a financial plan does not have to be complicated, it should be precise and based on your business plan. Carrying out a proper market survey should be a top priority as this will help you create a solid basis for the figures in your plan.

It is equally necessary that you work out as much of your financial plan as possible yourself. Discussing it with an expert, such as your accountant, can also help you prepare for the next step as well as approaching financiers or investors for capital. You can get in contact with an expert at Stransact, or explore our services to see how we can help your business.

Separate business from personal goals
Blurring the lines between business and leisure is never a good idea. The need for separating business and personal goals is imperative when starting a business. Having separate personal and financial goals is not a bad thing. Prioritize the critical components without jeopardizing the potential of the others. Once you've mastered this pattern, your business and personal efficiency will skyrocket.

Focus on liquidity
Liquidity is a measure of a company's ability to pay off its short-term liabilities. It is typically represented as a ratio or percentage of what the company owes compared to what it owns. These indicators can provide insight into the company's financial health.

Survey your funding options
It is never a good business strategy to put all of your eggs in one basket. This is particularly true when it comes to financing your new venture. Diversifying your sources of financing will not only help your start-up weather potential downturns, but it will also increase your chances of obtaining the appropriate financing to meet your specific needs.

Risk management
Identifying and reducing risk is something every small business needs to do, but it often falls to the bottom of the list simply because creating a plan that addresses all potential hazards seems like a massive task. Realistically, it is impossible to address every risk that could possibly affect your business but you can certainly reduce the list and put safeguards, like cybersecurity insurance and commercial property insurance, etc.

Pay yourself
Most small business owners don’t pay themselves, despite the fact that it’s necessary for them to be paid. The reason for this is that they think it’s more important to run their business than to take care of their own needs, you should make sure that you are adequately compensated for your work.

Paying yourself is an important part of running a business. This will ensure that your business has the funds to grow. As part of financial advice for small business owners, you should keep a look ahead at the possibilities for growth.

Plan for retirement.
Retirement planning is crucial for everyone, business owner or not. Experts recommend saving at least 15% of pretax income for retirement in a tax-advantaged plan, such as a simplified employee pension individual retirement account, or SEP-IRA. Any employer, including sole proprietorships, is eligible to establish SEP-IRAs. You can extend this opportunity to employees, as with taxes, an experienced financial planner can walk you through your options to create a plan suited to your company’s needs.

Founders who want to succeed must be adaptable, maintain a healthy balance, and surround themselves with the right people. Even with these seven strategies in place, success is never guaranteed. Startup failure is extremely common, with 90% of startups failing within the first five years, but by implementing these strategies, you can improve your chances of success.