Starting your business is an exciting time, filled with emotion, energy, frustration, and lots of hard work. Your brain won’t turn off for the next 6 months, trust me. You are going to be thinking about so many things – branding, logos, product/service development, finance, marketing and sales, administration and operations – just to name a few.
I have spent most of my life working with small business owners. Having built 5 businesses of my own, and working with more than 600 business owners, the most important thing I have learned is that thinking like a buyer, from the first day you open your business, makes it more profitable and successful. Building it right, from the beginning, is a key component of success. I bring the knowledge, skills and tools to your business to do just that.
For my first topic, lets talk money.
Budgeting and accurate cash flow projections are critical to your startup. Consider that the commonly reported number, that 4 in 5 new businesses don’t survive the first 5 years. While most don’t fail just because of money, the importance of accurate budgeting, cash flow projections and financial controls cannot be overlooked.
You need to develop:
1) An accurate budget that reflects…
a) reasonably attainable revenue projections
b) accurate and complete expense projections
2) Cash Flow Projections that show profitable growth over the next 3 years
3) A system for working, updating and refining your budget.
4) A system for knowing which bills to pay, when.
5) A system for modeling- “if I spend $5,000 today, how will it affect me in 6 months?
You will need these controls to run your business, and to pitch your business to investors and bankers. You can have it set up in an hour, and have to commit only a little time each week to maintain it. A well-structured budget will give you peace of mind as you make all the other decisions, and become your most valuable tool for success.