Updated: Jul 13
If you’ve been wanting to start a business within the last year or so, you’ve probably thought of plenty of reasons why now is not the right time. After all, the prospect of launching a startup in the middle of a global economic crisis can seem quite intimidating.
But here’s the thing: As the pandemic is coming to a halt, you have a clear picture of what consumers need. And those needs are quite different than they were before 2020 came around. You also have access to lots of talent around the world, as well as to small business loans with favorable interest rates.
Now could be the perfect time for you to jump in and fill a need in the market. But in order to take advantage of the moment, you must come up with a plan for how you’ll obtain and manage your startup capital. And if you’re a creative professional, this may not be your number-one talent. I strive to inspire and equip creatives to succeed. That’s why I’ve provided these practical tips for stretching your startup capital:
Write a financial plan.
When you’re planning to launch a business, it’s imperative to write a detailed business plan. This document will essentially lay out your approach to marketing, personnel, and the competition. Most business plans include a financial section. But this section often does not go deep enough into the financial strategies that a startup wishes to implement.
Along with creating a thorough business plan, it’s essential to include an in-depth financial strategy, even if it means creating a separate document. This plan will outline what types of funding you need (e.g., venture capital, angel investments, small business loans, etc.), as well as how much funding you’ll need to accomplish your goals.
When creating your financial plan, consider what products or services you’re going to sell, who you’re going to sell them to, what your target audience will be willing to pay, how much it will cost you to provide the products or services, and other factors.
Organize your accounting practices.
Too many new businesses fail due to a lack of sound accounting practices. It’s essential that you monitor and manage your company’s financial health from the beginning. Fortunately, there are many tools and processes on the market that will help you stay organized on the accounting front.
For instance, consider investing in invoicing software. The right invoicing software can save you from having to enter information manually by allowing you to run invoices in batches, but also customize invoices when necessary. With a product like Quickbooks Online Advanced, you don't need to be a financial expert to batch-process like a pro. This will save you a lot of valuable time in the long term, which ultimately means that it will save you money as well.
As a new business, don’t put too much thought into creating a world-class office or showroom. You’re not Google or Amazon, and your headquarters doesn’t need to look like theirs for you to impress clients. Be mindful of every dollar you spend and pick one or two things to focus your investments on. For example, if your company specializes in a particular niche product, pour funds into developing that product to be the best it can be. Then, invest in a good sales strategy.
As your business grows, you’ll need to expand your investments. Perhaps you’ll need to hire a digital marketing firm to help you develop your brand, or maybe you’ll need to outsource certain tasks to professionals so that you can focus on running your business. It really comes down to strategizing where your money goes and keeping track of every expenditure along the way.
There are many reasons to start a business in 2021. But if you do, it’s important to determine how you can make the best use of your startup capital and make it last. Remember to create a thorough financial plan, and use tools to stay organized. Finally, be intentional with how you spend your money so that you can grow at a healthy rate without blowing all of your capital.
Author: Amy Collett of Bizwell.org