A small business or a start up really needs a good financial planning, otherwise the things go terribly wrong. Here are the five tips, you should keep in mind, during the initial stages of running a small business.
1. Maintain a realistic budget
Maintaining a realistic budget lets you know where the money is going waste, and thus makes you alert, when you spend next time. It acts as a guiding hand rather than locking the owner into certain decisions ahead of time.
2. Don’t go for the luxuries
Thought of upgrading to the latest computer hardware or desire of buying a fancy company car and many such things, should not obstruct someone who is at the starting level of the business. Because, who knows the future circumstances of the business.
3. Understand finance concepts
Have a thorough knowledge on the business debt management. Make sure you understand the concept of finance and the different finance options available for small businesses and how much the financial solutions will cost.
Also Read: 5 finance tips to follow in 20s
4. Stay away from the fixed costs
You cannot take any business for granted. Even though you are sure that you will not move away from it, things may change completely one day. So it is better you do not make any fixed costs like spending on the buildings, renovating them etc.
5. Go for the freelancers
More the employees, more would raise your cost to accommodate things like computer, furniture etc. So, to avoid such costs, opt outsourcing or freelancers and pay for what they do for the day or hour. Freelancers effectively pay for their own office space, equipment and internet connection, plus they will often cost less than the real cost of the equivalent employee.
By Phani Ch