For many new entrepreneurs, managing finances is one of the more intimidating aspects of a startup business. Ensuring that funding, expenses and other financial elements are controlled from the beginning prevents minor issues from snowballing into major problems.
The good news is that financial management is not as difficult as you might think. Our fulfillment warehouse has been part of several successful startups, so we’re offering these expert tips to get your fledgling business rolling with solid financial planning.
Manage Expenses
In the beginning, expenses can be a huge drain on cash flow during the time you need it the most. Fortunately, most costs can be reasonably estimated ahead of time. Create a year-long budget covering rent, wages, materials, taxes and other fixed expenses and focus on keeping them as low as possible.
Avoid Commingling Funds
As the owner, you may feel all funds are ultimately yours so the line between personal and business finances becomes blurred. When you keep both sides completely separate, it’s much easier to track business finances and prevent personal spending from draining the company account. You should also formally pay yourself a salary rather than simply dip into company funds.
Keep Detailed and Accurate Records
When it comes to judging your company’s performance, you can’t afford to rely on gut feelings or instinct. Make sure an experienced accountant, either in-house or outside, is keeping track of revenue and expenses. Review financial statements regularly and make adjustments based on a clear, overall picture.
Don’t Overdo It
You may feel compelled to take on as many roles as you can to save money, but that strategy can actually be counterproductive. Learning unfamiliar skills on the fly can end up costing more time and money than hiring an experienced person in the first place. Delegating work frees you up to focus on your passion and grow the business.
Learn to Negotiate
Don’t take vendor terms at face value. You’ll be surprised at how often suppliers are willing to make concessions to gain your business. Prepare a game plan ahead of time so you know what your goals are. Remember that it never hurts to ask!
Invest in Technology
Business technology has become so advanced and so widely integrated that your company will be at a serious disadvantage from day one without it. Any investment you make in technology will pay for itself in money and time savings.
Establish an Emergency Fund
Financial experts recommend that people maintain an emergency fund to cover unexpected expenses, and a company is no different. Put aside a percentage of income during peak times to help tide you through the slow periods.
Fulfillment Warehouse Services That Grow Along with You
Are you struggling with adjustments as your business expands? Our fulfillment warehouse services can be tailored to meet you specific needs today and scale to accommodate future requirements. Contact us at Medallion Fulfillment & Logistics to learn more about why we are the first choice for one-stop warehousing, inventory control and order processing services.