The startup environment needs to be lean and agile to be successful. Startups face challenges similar to those of other small businesses. The greatest obstacles to startups are often those that are unexpected.
Financial threats to any new business can come from a variety of directions. An employee could trip and fall, exposing the business to a legal claim. A supplier could fail to deliver. The organization could get hit by a cybersecurity breach and lose money and customer trust as a result. Threats like these can be catastrophic for startups that aren’t financially equipped to cope, and most startups are already working to the limits of their budgets. Navigating these obstacles means that protecting cash flow is of the utmost importance.
Here are some financial solutions that will help your startup survive bumps in the road and continue to grow.
Use Personal Contacts
Leveraging your personal and professional network is a great way to create new revenue streams. You don’t have to ask these contacts for money. Instead, ask them to introduce you to people that might be able to help you regain your startup equilibrium by expanding your business’s reach.
They might have new clients for you to sell to or be able to suggest supplier relationships that you hadn’t considered. These new leads can help generate much needed sales or help marketing campaigns. Of course, once you business has regained forward momentum, be prepared to repay any favors you may have taken. Maintaining beneficial relationships may become a key source of revenue for any startup company.
Look at Loans
It used to be that a small business loan was a relatively straightforward way to gain working capital. But the current economic climate has seen many traditional lenders dial back on the financial help that they will provide. However, there are still avenues worth exploring. Look at the options available for getting small business loans online, and make sure that you have a clear idea of what you are going to do with any money that you receive. A loan can be a quick way to ensure work continues, but remember to factor repayments into your monthly outgoings.
If you can’t have work done efficiently, then rolling up your sleeves yourself will always have the best return on investment. It might seem like obvious and near condescending advice, but spending more time at your desk or on the phone than your competitors means that you can make new contacts before they do.
Line up as many new opportunities as you can, and remember the value of establishing relationships that will be profitable somewhere down the line. Entrepreneurs often need to make sacrifices, so skip that usual evening in front of the TV, and spend a little more time on planning your next step forward.
Cutting costs can be hard in a startup environment where everything has always been lean by necessity. However, don’t just consider cutting costs in the business space. Look at your personal spending as well. If you have suffered from some form of financial roadblock at work, then remember that you and your startup are intertwined. Make savings in your personal life and funnel the money that you save straight back into your business. Even small savings can be used effectively, so manage your home and business budget more carefully.
Finding new streams of revenue, planting seeds that will pay off financially in the future, or adjusting the way that you pay your bills can all help slow down the financial impact of a potentially costly setback. When startups are prone to vulnerabilities from any number of directions, having a financial safety net can be difficult to secure. Have a plan in place to tackle setbacks, and the future growth of your startup will be more certain.