Success as a startup has a lot to do with your finances. Many founders in their early days get caught up in the idea phase and lose sight of the best practices required to keep a healthy bottom line. While a startup idea is essential, it’s only the first step. Every startup needs to depict a rapid growth potential. That’s why investors and advisors are quick to request a balance sheet in any long-term funding conversation. On that note, here are some financial tips for entrepreneurs launching a startup.
Monitor your cash flow.
For a founder, one common piece of financial advice is not to compromise your cash flow. This startup principle informs your financial goals and drives all financial planning efforts. Many startups lose out on the cash flow battle for several reasons, but the most common is due to the inefficiencies with the entire sales process. Founders who think efficient sales management only revolves around creating the right products may be setting themselves up for failure.
After creating your product line, the next step is to build an efficient environment to improve your revenue stream consistently.
You can do that by investing in CPQ software and hiring sales reps. Another way to up a startup’s sales game is to focus on the entire quote to cash process.
At this point, you might be asking what is Quote to Cash? Quote to Cash (Q2C) is an important business process to manage your sales cycle with a priority to turn new leads into repeat customers. In other words, quote to cash is a round-up of a business’s end-to-end sales process. The entire process can start with product configuration encompassing all the other steps in making a custom quote. Thus, pricing, quoting, customer satisfaction, order management, order fulfillment, etc.
A Q2C solution can also be a critical step in providing accurate invoices to any prospective client. Using a salesforce quote-to-cash system, your sales team can take a potential client on a smooth journey between the initial offers you provide and the final offer settled on. And the process doesn’t end until there is a payment receipt to show proof of sale. As a startup, fielding your sales responsibilities in a timely manner is a great way to churn volumes of conversion results and significantly impact revenue management.
Go digital if you can.
Creating wealth as a startup depends on how fast you do things. This explains why many technology entrepreneurs favor automation in their operations and production efforts. Automation saves time performing repetitive tasks like filing tax returns, paying employees, and meeting vendor payment deadlines. Today, a mobile app like WealthSimple can provide you with all that and more to make the financial duty more manageable.
Some WealthSimple financial products include WealthSimple Trade, WealthSimple Crypto, and WealthSimpe Invest. WealthSimple clients enjoy a wide range of top-notch financial services, from tracking expenses to managing an investment portfolio. Most of these products are easy to use and require little to no technical background. Take WealthSimple’s Robo-Advisor investing platform, for instance. Even startup founders with no investment backgrounds can make responsible investing decisions.
Always be prepared for the worst.
Many young people have several misconceptions about entrepreneurship. Often, they envision a smooth ride to billions in initial public offerings (IPO). Unlike in movies, this isn’t always the situation. Some worse things can happen along the way, and your ability to make adjustments in your business template can become more crucial.
Take the impact of COVID-19 on U.S. businesses, for example. What happens when half of your sales representatives have to abandon ship? How do you maintain your financial grounds when high-value deals end? Therefore, it pays to have an exit strategy as you fantasize about getting a corner office in New York. This can be as easy as having a growth strategy or drafting a retirement plan early in the startup’s founding.