Finance August 3, 2015 Last updated September 18th, 2018 717 Reads share

7 Top Money Management Tips for New Entrepreneurs

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If you are a newly-minted entrepreneur raising a young company, then you must already have encountered problems related to unaccounted finance, lumpy cash flow and erratic income. There are a million things to attend to in a young startup and the owner no doubt has the responsibility of running the whole show. With the hours in the day never being enough, you obviously find yourself short of time to don all hats.

A good money manager is also a beautiful artist because not everyone is gifted with the ability to make the best use of what one earns. It takes a sharp and creative mind to keep tabs on money that comes in, use it wisely and save away some as well. If you are not a born finance wiz, you will have to work on your skills and build your abilities. If you are intentional with it, there is no reason why you will not excel in money matters.

Those who have walked down the road before you have been there and done that, so there is no harm in trying to

Here are a few helpful tips that can give you a clearer perspective on your finance.

#1. Diversification Is Important

All your energy and attention is focused on your niche market and your startup occupies your mind all waking hours. In such an all-consuming environment it will be difficult to take notice on what is happening outside your sphere of interest.

Entrepreneurs need to be aware of all happenings in the market. You have to keep your eyes peeled for good investment opportunities and make sure that you do not put all eggs in a single basket. Real estate, gold and equities are all good options for you.

Save up some money every month or a fixed percentage of your income every time to build up a corpus that you can invest outside of your business. The more you keep your personal and business finance separate and unrelated, the better are your chances of surviving lean times when your business is not generating enough income.

Having a separate source of income also helps you pump in money into your business when cash flow problems arise.

#2. Organize Everything

Organizing is tough but staying so requires a whole lot more work. If you are unorganized and believe you have it all worked out in your head, now is the time to sit down and record each and every thing on a piece of paper or in a spreadsheet. Cull out all the expenses that you know your company has each month and neatly categorize it under urgent, future and avoidable.

Analyze the items in the avoidable list and try to make a plan for negating these expenses. If investing in new equipment will bring down unnecessary expenses arising from using outdated equipment, do so. If hiring a full-time employee will help you save on outsourcing your recruitment needs, then by all means bring a recruiter on board.

Stale inventory gobbles up cash for no real reason. Off-load piled up inventory. Sell them at a discount or strike a deal with the supplier to take them back. Even if you incur some losses it will prove beneficial in the long run.

#3. Negotiate Wherever Possible

While neck deep in work many entrepreneurs forget to haggle for the best rates from vendors and suppliers, and end up short changing themselves. It is important you keep your networks warm and are in the know about prevailing prices, rates, offers and deals. You can pit your old vendors against new ones and end up landing money-saving contracts and deals.

#4. Network and Build Relationships

Sign up to membership websites and also make use of coupon codes to get discounts and deals. Many a time small business owners and entrepreneurs fail to notice that there are communities, groups and networks devoted to helping out young businesses. If you can contribute and be a part of such ventures you will discover benefits and advantages that will help you be frugal.

#5. Go One Step at a Time

Most entrepreneurs, both young as well as not-so-young, are in a hurry to reach their goals in as little time as possible. But as desirable as scorching growth may seem, it is always better you give things time to cool down before embarking on the next big thing. Expanding rapidly before you have proper infrastructure, strategies and corporate culture in place can cause tremendous strain on your resources, leading to a spectacular implosion.

So give time for your business to breathe, and stand back and analyze how things are panning out. Evaluate the costs and foresee expenses. If you need another round of funding prepare for that.

#6. Do Not Be Stingy Where It Matters

No one wants to work with a person always cribbing about money. As your business grows make sure you have enough funds in hand to hire the best employees and put the best practices in place.

Startups are young businesses aiming for the stars and you need to have the right people in the team to grow. A critical factor is that all employees must be on the same page and they need to be aware of your plans and intentions. Empower them and trust them to steer your company in the right direction. Trying to micro manage everything at this stage will not help your employees feel invested in the company.

The biggest strength of a small and thriving venture is talented, driven and committed employees. As you prepare to scale up, ensure the corporate and employee culture is also aligned with your goals.

#7. Get Help

All of us are not great with money, so if you are feeling overwhelmed it is highly recommended that you seek professional help who will be able to guide you better. Startups often work with financial consultants who offer customized services that are tailor-made to suit your specific needs.

Conclusion

As an entrepreneur you have a lot on your mind. Keep a close watch on cash flow and record everything. If you are organized and do not let things get messy, then it will not be very tough to manage smooth financial operations.

Images: “Money management red street sign over a white background./Shutterstock.com

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Kiara Medhurst

Kiara Medhurst

Kiara Medhurst is an Editor at My Gold Limited - New Zealand's leading precious metals merchant. When in leisure time, she loves to read books and spend time with friends and family.

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