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Effective cash flow tips for startup owners

Most people struggle to get to grips with their own finances, let alone steer a business and manage that workflow correctly. While starting a business is a challenging task, you are taking a financial risk. It’s your responsibility to ensure that you handle your business’ workflow with its best interests at heart.

Often times, the money you save or lend from a broker is usually not enough to make it through the beginning stages of your startup. However, if you work according to a strict budget, you should be able to restrict yourself from unnecessary expenses that may have a negative impact on your company’s future.

Many people think that budgeting and setting goals aren’t important, but, usually, those are the businesses which end up having to close their doors because they cannot seem to work with their money properly. So, if you want to look after your company’s financial health and guarantee a fruitful future for years to come, here are a few important cash flow tips you need to consider with your small business.

Request payment upfront

When you’re a small business owner, you constantly want to please people and offer support with the hope of a trade exchange in return. This is certainly the wrong approach to have, as people and companies which take advantage of you from the beginning will continue to do so. While networking is an integral part of growing your business, you cannot assist everyone who needs help. This is only going to set you back in hard times. The same goes for your payments structure. Of course, your payment structure will differ from business to business, but you need to request payment on delivery when possible. Do not allow delayed payments and always encourage upfront payments on jobs. This will help you to predict your month’s turnover in advance without relying on people to pay you when they “can”.

Become up to date with your admin needs

When you start a business, you need to dedicate time to your admin needs and always stay on top of what goes in and out of the business. If you need to send a client an invoice, make sure that you send it long in advance without having your customers wait for their invoice. This type of behaviour will lead to customers being just as casual and carefree as you are. Make sure that you also have a penalty system in place for late payments or consistent follow-up messages. When customers know how strict you are about your payment policy, they will respect your needs and adhere to your rules. If you need to outsource your admin needs, or any needs for that matter, to ensure they are done, do so.

Try and limit your free offerings

Whether you’re selling a product or a service, it’s important to offer complimentary demos if, for instance, you’ve met a potential customer or partner at an investment conference. This will spark their initial interest, and hopefully, lead to a business opportunity. However, with regular customers and trade exchanges, you cannot let people take advantage of your free offerings. Try and limit what “free” items you give out to people at your next entrepreneurship conference as these freebies need to benefit your bottom line in the near future. Starting a business is tough because you need to be restrictive in the type of interactions you have. If someone wants to try your product, very well, but make it a once off trade.

Always be accountable for your actions

If you know that you’ve gone overboard with your finances on a particular experience or business asset, you need to be prepared to suffer the consequences. This is why it’s so important to have a budget. In the first year or three, you need to accept that you won’t be able to spoil yourself or the company until you really start making an impact in the market. Always hold yourself accountable for your actions and try your best to spend your money wisely and record every purchase.

Final thoughts

Being a part of an ever-growing and changing tech innovation ecosystem requires resilience and dedication to keep moving forward. If you know that your product or service has tons of potential, work hard at making an impact in the industry. If you’re not earning money, you simply cannot be spending a lot either. Think of many different ways to market your product or seek investor assistance if you really need it. The last thing you want is to find yourself in debt, having to shut the door on your dream.

Marketing on a tight budget

Money in business is always tight. And even more so when starting a business. There are so many initial costs, renting costs, monthly expenses and business expenses. Now you want to add in a budget for marketing?

The marketing department can easily be overlooked and brushed off as not a priority cost to the company. But the truth is, if you want to bring business in and find more clients, marketing is essential to do that. And there are budget-friendly ways to efficiently market your business so, cut down on the take-away coffees if you need to, it’s time to go for marketing courses, create a budget and get your business out there.

Piggyback

So there are shortcuts for most things in life. And when it comes to marketing, there are some shortcuts here too. Piggyback marketing is when you use the success of another brand to boost your own marketing campaigns. But it obviously happens in a more professional way.

Find a company with complementary products to your own, and they’ll end up incurring most of the marketing costs on your behalf, while your product offers additional value to the complete package.

Target

You’ll save yourself a lot of time and money if you thoroughly define and research your target market and audience. Focus on the market of customers that are near to you, it’s more cost-effective and, especially if you’re just starting out, it makes the most sense. Why spend all your marketing efforts on an audience who are miles away from you and not aware enough of your brand to drive all the way just to buy your product?

Newsworthy

Get involved in innovative or community-change projects that will be worth mentioning in the media. Call in to local radio stations, make your way into the local newspaper and get people talking about you and your business. There are many simple ways to get free publicity for the company which won’t require a cash budget, just some time set aside to put in a bit of effort.

Referrals

Love the customers you already have. It can’t be over-stressed how important it is to keep current and returning customers, well, current and returning customers. As a small business with a tight budget for marketing, these people are what keep your business afloat. More than that, they have the ability to serve as marketers for your brand.

Ask your customers for referrals or testimonials that you can put up online or have them share within their own circles. Word-of-mouth marketing is a traditional marketing method, but should not be underestimated. Words have power, as do satisfied or dissatisfied customers.

Internet

The internet truly is a wonderful medium for marketing. Three channels that we’ll look into include email marketing, website and social media marketing.

There are free email marketing platforms, like MailChimp and Constant Contact, that allow you to send out mass mailers to a customer database you create. They are painless, have free templates and are a great way to communicate and share with your audience.

Another marketing method made possible by the Internet is creating a website. Again, there are free website platforms for you to make use of and having a website linked to everything you market will drive traffic to the site and, ultimately, to your store. Use your website to create tailored content that is brand specific to your business and promote your business message.

And then we have social media marketing. Facebook, Twitter, Instagram, Youtube and LinkedIn are top social media platforms to work with to run organic or paid marketing campaigns (paid campaigns that work according to your budget).

In the online world (and the real world for that matter), quality is king and you’ll be wasting your own time and money if you skimp on quality to save a few bucks. It’s a quick way to establish your reputation as cheap and not be taken seriously or as a professional business. You need to be aware of what you put out there and how people respond to it.

Measure

Whatever you do end up doing with your marketing department, be sure to test different methods, measure success and analyse pitfalls. There will always be room for improvement, whether it’s from marketing during a certain time of day or knowing when would be the perfect time to extend your range.

Measure the statistics, change it up, and measure it again. It’s an ongoing cycle and you will learn what works for your brand and what you should never do again. Hopefully, you’ll start seeing an increase in ROIs from your efforts and you’ll be able to implement new marketing strategies that you couldn’t previously afford.

Starting a business while on a budget

The rise of megacorporations seem to happen like magic: one day there exist this number of business, then suddenly a new business emerges with billions in finances and offering services or products we didn’t know we needed. We imagine these spaces to come from some magical land, filled with fortune, where the owners were born into wealth or had wealthy clients and investors willing to support them. But the reality is far more complicated. Indeed there is no reason a powerful business, like powerful people, can’t begin from humble beginnings.

Success of business isn’t tied to any formula, but a number of different properties and factors.

“Success,” says Forbes’ Micha Kaufman, “ is mostly determined by liberal amounts of “sweat and hard” work. It’s why passion is so essential: It sustains us through the hard times, and rewards in ways money never can.”

Importantly, for Kaufman, being connected and engaged is essential – which is why, in this day of online connectivity there is no excuse. Indeed, so important is online presence that it’s almost unheard of to not have a website. But, also, how you respond to social media portrayals. People have lost entire careers after social media faux pas, resulting in businesses themselves suffering.

By being connected, you alert the world to your and your business’ existence. Great marketing like this can do wonders for your business and brand. Considering almost all the big social media brands and apps are free, you don’t need a budget at all for this – except to pay the hours for someone to manage it.

And here you can higher students: not only are younger people more tech-savvy than older, but also they can get the first steps into the world of adult careers. Interns don’t have to earn a salary, though it might be ethical practice to pay them. However, due to their inexperience, this means you never have to pay the same for someone who is an experienced social media manager.

Mark Kingsley-Williams, founder of Trade Mark Direct, told the Guardian there are important first steps that people should consider.

“Starting a business should be all about getting information quickly to prove whether the concept will work, not maximising margins from day one. It is better to start out renting or leasing premises, company vehicles, IT equipment, and so on, rather than buying, and taking on people as contractors rather than employees, which you could consider once the business is more established.”

So whether you take out asset finance or look for used cars for sale, it’s necessary and possible to keep your budget low for the beginning part.

The rest of it should then be a basis on obtaining more clients, improving your business strategy, increasing your workforce, expanding your business. This means more income and therefore a bigger business. And all of that, as we’ve seen can happen on a budget – but what that also means is it can happen because you’ve already demonstrated you can be smart.

Which is something any client or investor is looking for.