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writing for godot

Top financial tricks to make your startup survive

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Written by Margaret_Reid   
Tuesday, 30 January 2018 01:17

When you’ve just launched money can be tight. For that reason, any trick you can use to keep the funds flowing that bit longer can change everything – from having you go under to throwing you a lifeline that allows you to keep going and grow your business out of trouble.

The question is, what can you do to stretch your funds that bit further? Here are some of the top tips we’ve found to help you go that bit longer until you get that lucky break or you can grow your client list to where you can once again grow your expenses.

Remember it’s easier to scale up than to scale down

Yes, appearances matter. At the same time, appearances can be hugely expensive. More importantly, psychology’s prospect theory teaches us that when we lose something we already have it hurts far more than the pleasure we gain from getting it in the first place. So taking away the full-on lunch will cause far more grumbles than installing it will provoke shouts of joy.

For that reason, be a bit of Scrooge when you set up. Start operating as bare-bones as you can and then, when you really that you can’t survive without something, get it. This will make it far easier to keep your expenses down. As an added bonus, when you give in to the people working in your company and get them what they need, they will be far more appreciative – so that’s a nice bonus.

Rent the meeting rooms

Of course, your clients don’t have to see you operate this way. So, when you set up a meeting with them, find a place that rents out high-quality meeting rooms for the time you need them. In this way, you can still maintain appearances, but you don’t have to pay for space while you’re not actually using them.

This is also a great way to station yourself in an area of town where you can handle the rent, while still giving the appearance of being located somewhere where the successful players are located.

Use the gig economy

Yes, you need the best team you can have. But can you afford to hire all those people full time? Probably nor – particularly if the projections about how well your business is going to do are a bit off (and let’s face it, as we’re not terribly good at predicting the future, they almost invariably are).

For that reason, make use of one of the best things to come out of the 21st century (For startups at least) the gig economy. Here you can bring in people when you need them, while not having to pay for them when they’re not needed.

Sure, you might have to pay them more per individual job, but as you don’t have to offer them any kind of severance package and you don’t have to pay for their insurance, they can still be better value for money.

As an added bonus, you can scale up and down much faster when part of your team consists of freelancers.

Consider different climes

Another possibility to consider is to base yourself out of somewhere cheaper and do all of your connecting to the internet. Where do I mean? Well, there are plenty of places in South America and Asia where your dollars will stretch many times further than they will at home. In many of these places you can go on a workstation and even though you have to pay for flights, still come out a lot cheaper than you otherwise might.

Even better, you can scout for new workers, new providers or for opportunities to expand your business into these foreign climes. This might open up entirely new avenues that otherwise wouldn’t have been possible. Of course, you will need to speak the language or you’ll be forced to rely on professional translation online.

Track everything

The best way to make sure you don’t spend more than you have to is to make sure that you’re aware of what you’re actually spending. For that reason, get the right accounting software for your firm. This will allow you to know where your money is going and catch any leaky taps before they drain your entire bank account.

Note that it’s generally a good idea to get advice in this regard to make sure that you get the right solution for yourself. Yes, getting this advice might put you back a bit of cash, but in the long run, having the right setup in place can pay you huge dividends.

Have a plan

Sure, you want a multi-million-dollar business. That, however, is not a business plan and if a surprise investor comes knocking, that is not how you’re going to be able to draw them in. Even though plans might change, you still need to have an idea of where you’re going and how you’re going to get there. Because as they say, when you don’t know what port you’re sailing, no wind is favorable.

So draw up a business plan. Discuss it with people who understand those things and make sure that whatever sources of revenue you’ve envisioned are actually possible. Otherwise, you might be aiming for a sky castle that can’t be built.

Last words

Startups are a lot of work, particularly on the financial front. So make sure you take whatever steps you have to stretch the money you do have as far as you need to. Be hard on yourself, because if you’re not then the world will be, as things rarely work out like we originally envision.

If you can do all that, then you’re giving yourself the best opportunities to succeed. You might even end up with a bit of money left in the bank when your company starts purring and running like a jaguar. And that is an amazing place to be – not just for your company but also for your stress levels.

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