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If you’re interested in launching a start-up, such as a Toronto mobile phone repair company, then there are some things you need to consider. Chief among them? Financials. Your financial decisions early on in your start-up days are vital to your long-term success and overall company longevity.
There are a number of pitfalls that you can fall in to, such as keeping personal and business accounts together. Here are a few financial tips for your next start-up.
Put Your Focus To Gaining Customers
Your primary focus needs to be on gaining new customers and not so much on customer retention. While customer retention is important, you need funding and funding now. You gain the quickest funding through customer acquisition and not through return users and buyers. Plus, it’s likely that the customers understand you’re a new company and are willing to go through a bit of a rough patch if they enjoy your product or service. This allows you to free up the time you need for acquisition.
Develop Financial Goals
Create a map of where you’d like to be in the next week, month, and year. Decide what growth rate you want to aim for in your company and then work out the logistics of how you’re going to achieve those goals with a comprehensive strategy. Gaining a clear understanding of your financial goals will be key to understanding how much your company is growing. You can also research the growth rates of other start-ups in your industry to compare and contrast.
Separate Personal and Business Accounts
It’s too easy to keep personal and business accounts together or at least occasionally cross the line. But come tax time, this is going to be a nightmare to deal with and it will also muddle your results at times. Make sure to create a personal account and business account for bank transactions, credit cards, invoices, and more.
Religiously Keep Expense Sheets
Know the money that’s coming in and out is important to gauge where your company is at. Keep a close eye on all on of your purchases and on all of the money coming in. Find a good financial software to use so that you can scan in your receipts to make things easier. A good software will provide you less headache and make things run smoothly.
Keep Fixed Expenses To A Minimum
Start-up companies need to be as lean as possible. The reason being is that you need to create as much excess capital as possible so your firm can churn out positive results and grow for the future. One way to keep fixed expenses to a minimum is by keeping fixed costs as low as possible. These are of course your expenses that don’t change such as rent, employee costs, et cetera. Make sacrifices early on by choosing your location wisely. You don’t need a pristine office or employees for every task. Teach people how to wear multiple hats and work out of something you can easily afford, even if it’s a bit cramped.
Be Prepared For The Worst
Understand that bad things happen and be prepared for them. While it’s unlikely a cataclysmic event will happen and then tank your new company, there’s always a chance for it. Prepare for the worst possible events financially and with a few backup strategies you can use to get back on top. This will make sure that no matter what occurs, you’re going to be able to handle it and survive the event.
Don’t Forget To Pay Yourself
You’re an employee to your company, not just a slave putting in 80+ hours a week. You deserve to get paid. So many new founders skimp on meals and living accommodations so that can put in all their capital to the company, and while this is somewhat commendable, your health will end up being more of a benefit to you than your company ever will be. Pay yourself so that you can live as comfortably as possible through the early days of your company.
Launching a start-up company is a herculean task and one that takes financial discipline. Mind these tips so that you can be better prepared for the future growth of your company.