Are you thinking of starting a business?
You’ll come across a lot of advice out there, but not many people are willing to talk about the sheer amount of hard work that it takes to lift yourself up by your bootstraps when starting a new business.
To help you along, here are some tips from the most successful entrepreneurs who aren’t afraid to tell it like it is, to help you avoid some of the mistakes that they went through.
1. Manage Cash Flow
One of the leading causes of failure for startups is the lack of cash flow or poor management thereof. To manage your business’ cash flow, you must keep an eye on every inflow and outflow of cash.
Failure to do this could land your business in murky waters, financially speaking.
No matter how amazing your product or service is, running out of money can really put a damper on things. For best results, we recommend setting up a budget and working very hard to stick to it.
2. Pay Yourself First
As passionate as you are about your business, you must balance that out with making this a sustainable business venture.
This means compensating yourself enough so that you’re able to put a roof over your head and food on the table, especially for the first few years.
Over time as your business grows, you’ll be able to pay yourself the big fat salary that you want. For now, pay yourself enough to be comfortable.
3. Track Spending
Startups are like babies, they need a lot of attention in the beginning, and in the case of a business, that attention is in the form of expenses.
Stay on top of it all using reliable accounting software, as hiring a full-time bookkeeper may not be a cost-effective move right now for you.
With the right accounting software, you’ll be able to keep up with cash flow and manage your taxes when it’s time to deal with the taxman.
However, over time, you must hire a professional accountant as things are likely to get too complex for a one-man show.
4. Minimize Fixed Expenses
Another key to success as a startup is to run a lean operation.
This means keeping your expenses to a minimum. Use a shared workspace instead of renting out a huge office space. Use software and tools such as a stock advisor instead of hiring full-time staff for certain services.
Basically, get your priorities straight and run a lean and tight ship while you’re starting out.
5. Get Customers
Your customers are the lifeblood of your business. That’s why you must constantly look for ways to scale your ability to acquire and retain customers.
Determine what the best acquisition channels are for your business and then optimize them in the most cost-effective way possible.
Now, you won’t be able to test all the available acquisition channels in the beginning. It’s simply too time-consuming.
Your best bet is to pick the most lucrative opportunities and stick with them. Once you’ve managed to scale them you can then start looking at other channels.