Effectively Managing your Budget as a Startup

BradYoung04Starred Page By BradYoung04, 19th Mar 2015 | Follow this author | RSS Feed
Posted in Wikinut>Business>Starting A Business

Being part of a startup is an exciting time, and ensuring it reaches its goals is important to everyone involved. You can put yourselves on the right track by efficiently managing your budget.

Introduction

Many difficulties arise during the start-up phase of a business concerning budgets; not only does every penny count during the crucial formative stages, but properly established boundaries have not yet been put in place, mainly because the cost of doing business is not yet clear. It helps for a startup to establish a financial structure as soon as possible, but managing the budget before this becomes a reality can be the difference between survival and failure for a small business.

Although it is difficult, there are several effective ways to ensure responsible expenditure until a proper budget is established. So how do you best implement this spending and manage your funds?

Prioritize your Clients

Figure out which of your clients or projects should be the focus of your attention, and divert your spending as such; this doesn’t always mean giving up on a project entirely, just knowing how much attention it requires. Make sure you have enough people to complete the work if you are taking on new business, as you’ll want to match your client growth with internal growth. Failing to keep this level will inhibit your progress and ultimately cost you more money.

Whilst it may sound like an odd decision to drop a client at this early stage, it could be a very wise decision in regards to long-term finances. Cutting out a client, if the decision is right and the partnership isn’t working out, will prevent valuable time and money being diverted to a project where it could be better spent.

Focus on Saving

Whilst conservative spending is important, there’ll always be points where money has to be spent. Despite this, you should always focus on investment options that generate clear profits, guarantee returns, or progress the startups financial endeavors. All your company money should be treated as crucial savings, and the only time it should be spent is developing lead projects and selling them.

Only scale up your spending simultaneously with your growth; one mistake startups make is scaling up their operations and output in anticipation for large volume orders or big projects, only to end up wasting resources and money whilst they wait for this to happen. Don’t be premature, be patient with your spending and you’ll achieve natural business growth.

Invest in Software

If there’s one thing you should be committing spending to, it’s software. Investing in workable computer solutions, such as business budgeting software or cloud accounting, will not only help you manage your money with greater ease and less expenditure, but provide a long term investment that will still be useful long after you’re out of the startup phase of your business.

Even if it unclear at the early stages, try and choose software solutions that will benefit the aims and objectives of the company long-term. Certain pieces of software will seem like an investment early on, but will be made redundant when expenditure is level and the company has grown. Try and think ahead in this regard.

Negotiate

When considering overheads, vendor costs, or a crucial agreement you’re working out with another party, negotiate the terms on everything you’re offered. You should get into the habit of always putting the odds your favor. During the early stages, an extension on due dates or a better deal for your company can go a long way, and ultimately help you maximize your budget effectively.

Don’t forget to negotiate important terms with your clients too. Put clear boundaries and well established rules in place to define what work you’re going to do, for how long, and how you’re going to get paid for it. Once you have these agreements locked, you can focus on doing the work and establishing your startup on the market.

Thanks for Reading

For more business related articles, check out my Wikinut profile, or follow me on Twitter for more updates on my work.

Tags

Budgeting, Business, Finance, Software, Startup

Meet the author

author avatar BradYoung04
I am a MBA grad who can transform your business. Follow me for straight talking insights into running successful businesses in a fast paced world. I am always working or surfing in the Californian sun

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Comments

author avatar Kingwell
16th Apr 2015 (#)

Good and interesting post. Thank you for sharing. Blessings.

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