Starting a business might seem easy, but maintaining one is what makes it challenging. It’s not difficult to start a company. All you have to do is think of a name, fill out the documents, and submit them to the Companies Registry. The biggest challenge lies in running and managing the business. Jonathan Long, the founder of Uber Brands, shares his secrets of managing his company’s financial management, guiding you through your entrepreneur journey!
1. Keep a healthy cash flow
There are numerous reasons for start-ups to close down. One of the most common reasons is insufficient funds for operations. Having a clear picture of how the money is spent in the company is essential for managing the financial status of the business. If the cash flow is not being well-managed, the company will fall into a very dangerous situation. It’s a wasted effort if your company does not have adequate funding to go on.
How can you tackle this challenge? You can start off by studying how much funding and cash your company owns. Then, you can set budgets for various expenses so you can manage your finances. If things go wrong suddenly and you need an extra emergency cash flow, Reap is your to-go option for paying expenses with credit cards, including rent and salaries. Before taking credit cards as your payment option, don’t forget to consider if you can repay the bills. With Reap, you can enjoy up to 58 days interest-free credit card repayment period. Once the repayment period expires, credit card interest rates could go higher than loans. Therefore, you should think about whether your business can restore cash flow in a short period, or is it possible to use cash return by credit card turnover to earn a return higher than the surcharge from Reap.
2. Track all your expenses
When starting a new business, managing expenses can be overwhelming. Especially when funding is tight, you might not be willing to pay for an outsourcing accounting firm, let alone hiring a full-time accountant? We recommend choosing accounting software instead of using paper and pens for your bookkeeping or hiring someone for help. In fact, there are lots of free accounting tools, including Wave and ZipBooks. If you are opting for better choices, paid applications like QuickBooks and Due integrate with other tools that help you keep track of your finances efficiently.
3. Cut down fixed expenses
Apart from increasing revenue, cutting down costs is essential when it comes to keeping the business running. Having a nice office to work in of course could make your work life more comfortable. Yet, don’t forget to put your focus on issues that actually bring revenues, instead of spending only on consumables. Lots of start-ups tend to put a lot of resources on facilities, and forget about their ultimate goal – profiting.
4. Stay cautious and optimistic
When people talk about staying cautious and optimistic, we might think of investing. As a business owner and an entrepreneur, keeping a cautious and optimistic mindset is important as well. When people start to see results from their businesses, they start getting too relaxed. Planning for the worst should always be part of your action plan. For instance, when everything goes steady, don’t think of quitting and letting go of your only income source. Prepare a saving plan for yourself and for your business is essential in case anything happens.
Furthermore, as entrepreneurs, you need to prepare your own pension. In addition to business, you still have to open additional accounts to save money, or for investment, etc., to make up for not having MPF as a boss.
5. Manage your time wisely
As easy as it sounds, time is money. Jonathan mentions that time is of value. You only have 24 hours a day. When you are planning for your daily schedule, keep this in mind. Doing things that are not beneficial to the company is a waste of money and time for you and your company.
6. Focus on new customers
It’s rather worthless having a business without customers. The earlier you could discover ways to attract new customs, the better chance the company could survive and continue. Once you’ve understood what drives the business and the customers, you can start reducing costs.
Of course, with limited funding and time at the beginning, it is difficult to test all the methods. Therefore, you should focus on what brings the most profits. Once you’ve succeeded, you will have more resources to discover other channels.
7. Reward yourself with a pay
Lots of people think the company is their assets, so they don’t pay themselves with a payroll. In fact, you deserve everything you’ve worked on and put the effort in. Of course, you don’t have to pay yourself a big proportion, at least a payroll good enough to pay for your daily expenses so you can enjoy your life at work and outside work. Once you’ve eased your financial burden, you can devote yourself to work.
8. Set your financial goals
Becoming a billionaire is everyone’s dream. Yet, it’s essential to set your achievable financial goals into stages that can be quantified. The easiest way is to divide your financial goals into monthly, weekly, and daily revenue targets. With manageable goals, you can make sure that you will be able to keep track of and maintain your targets. In addition, you can set milestones and small goals for yourself, which keep your faith going on this journey to entrepreneurship.