What is the best startup financial advice you have ever received?
To help you practice sound financial management in running your startup, we asked successful startup founders and business owners this question for their best insights. From relying on true professionals to not putting all your eggs in one basket, there are several pieces of financial advice that should guide you in managing the financial operations of your startup.
Here are six pieces of financial advice these leaders follow in running their startups:
- Rely On True Professionals
- Don't Shy Off Spending Money if You Have a Great Idea
- Give Employees Fair Compensation
- Start Saving Money Right Away
- Be Conservative in Your Expectations and Optimistic in Your Approach
- Do Not Put All Your Eggs in One Basket
Rely on True Professionals
My father, who was a successful entrepreneur, gave me one essential and universal financial advice that influenced the way I perceive doing business. He always used to say that when it comes to making financial decisions for your company, you should always rely on the help of experts and professionals. In other words, the knowledge of people who are true experts in the field of accounting or business & tax consulting can bring tangible benefits to your business. Paying even a small fortune for their services is always worth it, as it's an investment that can save you a lot of money and help you avoid costly mistakes.
Don't Shy Off Spending Money if You Have a Great Idea
The best financial advice I have ever received is if you have already validated your idea, then go fast with your marketing efforts and don't shy off spending the money on your growth. When you're starting out, it's easy to get caught up in what all the experts say: "start with a small product line", "be patient", "keep costs down". But if you have done your work, you have a great idea and you know it's going to hit the market, then at this point, you have to stop being a baby business and start acting like a grown-up. You need to be aggressive about getting your company off the ground—and if that means spending a lot, then do it. But remember, I said if and only if you have done your work and your numbers are aligned with the projection of the growth curve. If you don’t have this data, then you need to keep costs down and stay humble until you do.
Tiffany Homan, Texas Divorce Laws
Start Saving Money Right Away
The best financial advice for business that I ever received was to start saving money right away. This is something that I did not realize until later in life. When I was younger, I would spend all of my money on things that I could not afford and then have to wait till next month's paycheck came around before getting another paycheck. It was very stressful and caused me many sleepless nights worrying about how am I going to pay all of my bills this month? But, when I started saving some money from each paycheck, then it made it easier for me because now when the bills come in, there is no stress or worry about how am I going to pay them because now there is plenty of money saved up for emergencies.
Amer Hasovic, Love & Lavender
Give Employees Fair Compensation
The best financial advice I ever received was to always ensure fair compensation to my employees. Before I start investing in any other aspect of the business, I make sure that my employees are happy and this has worked wonders in motivating employees and increasing their productivity. If the employees are able to meet their financial obligations out of the pay they get in the job, they are able to focus their energy in ensuring the success of their business. Following this advice has worked wonders in keeping my business on top of the market competitors.
Yongming Song, Imgkits- Photo Editor
Be Conservative in Your Expectations and Optimistic in Your Approach
The best financial advice I have ever received is to be conservative in your expectations, but optimistic in your approach. I think this is great advice for small business owners because it helps them set realistic goals and avoid getting discouraged when things don’t go as planned. Being conservative means you have a healthy amount of skepticism about your business plan and are willing to adapt when things don’t go as expected. It also means that you don’t expect your sales to skyrocket overnight because there will inevitably be ups and downs along the way — especially when you are just starting out — so it’s important to keep things in perspective.
On top of that, maintaining a positive outlook can help you deal with unexpected setbacks or challenges that come up along the way. If you expect everything to go smoothly from day one, you might get discouraged when it doesn’t happen that way — which could lead to giving up on your dreams altogether.
Amy Gilmore, Learn Financial Strategy
Maintaining a positive outlook can help you deal with unexpected setbacks or challenges that come up along the way.
Do Not Put All of Your Eggs in One Basket
Diversify. Invest in many fields. You can always choose what suits you the most. Some may go for stocks, others for equities. Many dip their toes and settle in real estate. Determine your investment profile. Whether you are conservative or aggressive. How much risk can you take? It will all depend on your preference. It will also pay off if you can do some research and study the market and the trends. Forecasting is also one virtue that you must have. Business ventures will not offer guaranteed 100% success. It will take a lot of effort and more. Be sure to build your future on solid grounds. It will be wise to scatter your finances on several investments. It will most likely work to your advantage. You will always have a buffer. If one of them does not work out, you have something to fall back on with the others.
Laura Martinez, PersonalityMax
Learning financial wisdom and strategy for Startups and for Founders can come in many forms and fashions. From understanding how to personally utilize your resources and learning how to leverage your revenue or investment to grow your business. The key here is to establish a strategy, seek expert advice, and stay grounded as you ride the ups and downs. Surround yourself with mentors, advisors, and professionals who are looking out for your best interest. If you ever have questions about how to structure your finances for your business - reach out to us at firstname.lastname@example.org.