Stopping Startup Financial Frustration March 1, 2017My MoneyOff

Handling your finances in a startup can be as difficult as anything else you would care to throw into the ring. The precarious position many beginner companies exist is between the ability to grow as a business and to actually get money from their customers. The risk that every small business has to make to get themselves out there is to take a financial leap, and no amount of online presence or marketing strategy will give them the essentials, hard cash. We suffer because we cannot distinguish the line between offering a service and needing to pay our employees. A workplace can suffer from low morale for many reasons, but not being able to pay your bills is right up there. With many small companies, you operate on a small degree of faith in your workmates. Everyone is holding themselves together, like a human house of cards. And one part of the equation faltering can spell a big problem. There are easier ways to stop it getting to that point…

Look At Your Finance Options
The amount of options available to a business is varied, and although it is done on a case by case basis with many banks, you can, to an extent, take the law into your own hands when trying to find a suitable funding method. There are non-recourse options available to you, whereby the money that is owed to you by your customer is a third party, and this is done to save you chasing the customer. It’s also done with a fast turnaround, which is of the essence if you have your own staff or bills to pay. Other options, besides the standard peer-to-peer loans or investment angels, are to do some crowdfunding. It has skyrocketed in recent years and has even been done by Hollywood filmmakers, and it could help you too. If you got a huge amount of people to donate a minimal fee, it could mean that you reach your target in a very short space of time. But it’s not as simple as that, you need to make your pitch succinct and successful. Money isn’t just handed out on these sites.

Lay Down Your Terms
This is a must for any small company. Running a business that goes into massive debt and then gets out of it for a day before heading right back in there again is a depressing cycle for anyone to be in, which is why you are better to lay down your terms before you enter into any agreement with a client or a customer. Doing this establishes two things. First, by laying down the ground rules, it gives you the option to be honest about every transaction. If you are a pay upfront company, it may lose you a small amount of customers, but do you really want to waste a lot of time chasing up payments? Second, it’s doing you a massive favor because you won’t be out of pocket! Money makes the world go round, and it certainly helps a startup achieve their goals.

Photo by EMprize | Shutterstock

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