Keep your Financials Straight!
As a startup, you have multiple tasks at the same time. Running a business with only a handful of people is a great challenge and you often struggle to keep it all in order. Especially accountants are seldom among the founding team. But one of the most common reasons for a startup to fail is that they run out of money.
You can easily avoid this fate by staying on top of your cash flow: Know how you earn money, hence, where your money comes from, and how you spend it, knowing where it goes. The best way to keep track is to monitor your expenses. If you do not have an accountant, find a suitable accountant software that is available for free or for little fees.
Tracking and monitoring your spending will also help you later when you must deal with taxation. As soon as your budget allows it, it may be a good idea to hire an accountant. Young businesses are strongly dependent on every Swiss Franc. Only monitoring and tracking will not save you any money. Limit your fixed costs and expenses like renting a desk in a co-working space rather than a fully-equipped office in the city center. Only spend money when necessary for equipment or services that are really needed. Also, maintain a positivist attitude, but always prepare for the worst. This means for example keeping your source of income as long as possible to avoid running out of cash too early. Also, keep an emergency savings account for unforeseen setbacks.
From the very beginning focus on acquiring customers. Identify different channels through which you will attract your customers’ attention and choose the most suitable one(s). Even in the very early stages, when you merely have a prototype, involve potential customers and keep them in the loop about your development. The product or service you are creating is made for them, so involve your customers as often as possible to create a solution that really does solve their problem.
Take action when organizing your financials and establish financial goals. It will be easier if you have reachable and measurable goals that you can monitor monthly or weekly. Setting financial goals helps you stay on track and supports your budget planning. Most importantly set these goals according to your 6-months and 1-year plan and involve your team members that are directly affected by financial decisions (budget for product development, marketing, sales).
Although you have million topics on your agenda, never let your financial situation out of sight. If you keep track of your expenses and make sure you know the details of your cash flow, you decrease the risk of failure. Make monitoring your cash flow one of your top priorities!