Harnessing your ideas and energy into a new idea is an exciting time. As your idea catches fire and gains fans, you can swell with pride … and sweat a little with anxiety. What next? How do you keep the cash flowing? How will you pay for new materials? new employees? fresh ideas?
The answer is budgeting with the same savvy and dedication that brought you into business. With these tips, you’ll be on your way to setting a firm future that keeps you as the talk of the town, even when you’re no longer the new kid on the block.
Set Reasonable Goals
It’s hard when the excitement of a startup energy overwhelms you, but setting budget goals is the time to believe in financial facts not your glowing press. While it may be tempting to grow quickly while the proverbial irons are hot, set a realistic pace for growth that not only reflects your success but also industry benchmarks.
Proportion and Assign Budget Goals
Instead of making sweeping departmental goals, look at how you can instead apply micro goals to specific sections for ownership. This not only saves you from overwhelming one area of the business, but also allows you to harness individual motivations, while building budget strengths.
Understand your Cash Flow
It’s hard to anticipate business cycles on a limited track record. But the old saying, “Revenue is vanity, cash flow is sanity, but cash is king,” came about for good reason. While it’s important to watch revenue, it’s even more important to monitor trends in positive and negative cash flows, not only by months but throughout the month, so you know when it’s most important to utilize wise spending and build reserves.
Plan Realistically for Staffing
Staffing is a hard budget area, especially for young, growing businesses. You must not only figure out on paper how many employees you can afford to hit required targets, but you must also gauge productivity of specific configurations. This is especially tricky when your business provides the hot industry buzz and top talent – with their top salary requirements – come to you. Balance your immediate needs with functional and conceptual growth. This human capital remains one of your most valuable but fluid elements in your budgets. Be sure to allow in time for on-boarding new teams or divisions and make appropriate allocations to protect in case of essential-employee losses.
Seek Professional Help
Yes, running a startup might make you feel insane, but that’s not the help we’re referring to here. Make certain that you’re recognizing your strengths and weaknesses, whether it’s recruiting, liability assessment or financial. While you might not be excited to part with more of that delicious profit, having professional expertise at hand often saves money long term. In the world of finance, this can be through more accurate forecasting reports, increased tax knowledge or simply keeping track of all the quickly moving parts.
If you need some professional help to help you make sense of your financials and guide you toward a more accurate and realistic startup budget, consult with one of our experienced professionals. We keep rapid growth working for - not against - you.