True, starting a startup is hard. But keeping it going is even harder.
There are a lot of things that can kill a startup: bad product, bad team, bad market, bad timing. But the number one killer of startups is running out of money. That’s why it’s so important to have a good financial plan for your startup. A good financial plan will help you raise money, manage your cash flow, and make smart decisions about how to spend your money.
Here are a few tips for creating a good financial plan for your startup:
1. Know your burn rate
Your burn rate is the rate at which you are spending money. It’s important to know your burn rate so that you can make sure you have enough money to last until you start generating revenue. You can calculate your burn rate by dividing your monthly expenses by the amount of cash you have on hand.
2. Raise money wisely
Raising money is one of the most important aspects of running a startup. But it’s also one of the most difficult. You need to make sure you raise enough money to last until you start generating revenue, but not so much that you dilute your equity or give up too much control of the company.
3. Manage your cash flow carefully
Cash flow is the lifeblood of any business, but it’s especially important for startups. You need to make sure you have enough cash on hand to cover your expenses and pay your employees. You can manage your cash flow by tracking your expenses carefully and making sure you have a good handle on your burn rate.
4. Make smart decisions about spending
One of the most important aspects of running a startup is making smart decisions about how to spend your money. You need to invest in things that will help you grow your business, but you also need to be careful not to overspend.
5. Focus on your core business
Startups need to focus on their core business and not get distracted by side projects. It’s important to stay focused on your goals and not get sidetracked by things that are not related to your business.
6. Hire carefully
Hiring is one of the most important aspects of running a startup. You need to make sure you hire people who are a good fit for your company and who will help you achieve your goals. Let’s take you here for my article about bias that we frequently encounter in recruitment processes.
7. Be prepared for setbacks
Setbacks are inevitable in any startup, but it’s important to be prepared for them. You need to have a plan for how you will deal with setbacks and make sure you have the resources in place to deal with them.
8. Keep your investors happy
Investors are an important part of any startup. You need to keep them happy and engaged in your business. This means keeping them updated on your progress and making sure you are meeting their expectations.
9. Be flexible
Startups need to be flexible and adaptable. Things will change and you need to be able to change with them. This means being open to new ideas and being willing to pivot when necessary.
10. Persevere
Running a startup is hard work and there will be times when you feel like giving up. It’s important to persevere through these tough times and keep going until you achieve your goals.
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Co-founder at Novus
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