Singapore
Singapore
As the financial year is coming to a close, many new businesses are starting to evaluate their overall cost spending. Some might say that success is directly correlated to effective money management, so there’s no better time to start taking a closer look at spending patterns across departments and identify better steps to take moving forward in these initial stages.
Has your start-up been spending more than it should? If the answer is yes, here are some simple tips to circumvent further spiralling.
When your business starts expanding, it can become rather difficult to keep track of everything that’s happening on the ground. Dave Ramsey, CEO & Founder of Ramsey Solutions, recommends creating an overarching business budget that juxtaposes projected income against necessary expenses. This helps your business to prepare for periods of elevated spending, while still being able to allocate resources accordingly. This projection doesn’t have to be entirely accurate; however, it does help in providing an informed snapshot of what’s to come.
One of the biggest mistakes any business can make is to spend liberally without being entirely sure that they will be able to succeed. Some believe that substantial investment is required for any business to take off; however, the amount of investment should be carefully calculated and controlled. New Perspectives claims that businesses should refrain from going all out on marketing, business cards and inventory until a success trajectory has been charted and is firmly in place. Unsolicited spending may result in businesses suffering from a “cash flow blockage”, which might negatively impact other aspects of the business.
Not being finance-savvy is a common problem that intimidates business owners. But in this modern day and age, there are many technological tools available to help even the most clueless of business owners. Forbes identifies a couple of them – some of which are even free to use – such as YNAB, Personal Capital, Quicken and Mint. In fact, using such tools can also help to alleviate the stress that many start-up business owners face, freeing up their time to focus on other things like strategic planning for your young company. This is further emphasised by Medium, who underlines the importance of investing in technology in order to stay ahead in the market.
No matter how smooth sailing things might seem to be, you never know when things will turn upside down – having a back-up plan is always useful in such cases. Quicken urges suggests to set aside some of your funds in an emergency back-up account, as well as to invest in insurance to weather through such situations. Doing so helps to ensure that your new business won’t be derailed by unexpected road bumps and lessens any deviation from your long-term goals.
Managing spending and costs should be a priority for your start-up business. Keep these tips in mind and effectively manage your business finances for a smooth year ahead. Practising these financial habits in early stages will undoubtedly set a strong foundation for your start-up’s future!
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