Hey tech sis, managing your business finances as a tech startup can be tough. You’re probably not just a rag-tag group of friends working out of your garage—you’re likely a corporation or at least a small but growing business. And while that means you’ve got more support, it also means more responsibility.
So what do you need to do to stay financially stable as a tech startup? Here are ways to manage your business finances so that you don’t get crushed by the weight of your own success:
If you have no idea how much money you’re spending or making at any given point, it’s going to be really hard for you to manage your business finances effectively. Set up an accounting system that allows you to track expenses and income easily so that it’s easy for you or anyone else who needs access to this information (like investors or employees) to find it quickly when they need it most.
Use automation where possible.
There are many apps out there that can help automate some parts of your accounting process—for example, one app might automatically send invoices after an order has been placed on your website while another app might automatically send reports on sales activity each month so that investors can see how well their investment is performing without having
Set Goals and Priorities.
Before you start spending money, decide what your goals and priorities are. This will help you spend less on one area while neglecting another that is equally important to the success of your company.
Understand Your Costs.
It is important to understand what it costs to run your business to ensure that you have enough money each month. Make sure that your expenses are minimal so that they don’t take away from other important things like marketing or product development.
Create budgets for each month so that you know how much money needs to be taken out of each paycheck for monthly expenses such as rent/mortgage payments and utilities bills (gas/electricity). This way, there won’t be any surprises when payday comes around!
Don’t spend more than you make.
This one is pretty self-explanatory. If you’re spending more money than you’re bringing in, then it’s going to be hard for your company to stay afloat. It’s important that you keep track of how much money is coming into the company and what it is being spent on so that there are no surprises when it comes time to pay bills or do payroll.
Track your expenses.
You need to know how much money you spend on things like office supplies and employee salaries so you know how much money is left over at the end of the month to save or reinvest into other areas of the business. This will also help you figure out how much cash flow is coming in, which helps with planning ahead for future expenses like buying new equipment or hiring more employees.
Don’t forget about taxes!
You need to keep track of both federal and state tax codes so you don’t accidentally pay too much or too little on them annually – especially if you plan on taking out loans from banks or investors later on down the road (which means more paperwork!).
Get help from experts
If this is something that seems daunting or confusing, then consider hiring an accountant or financial advisor who can help you manage your finances. They’ll be able to give advice on what steps need to be taken in order for your business plan to succeed financially. They might also have connections with other professionals who can help with other parts of running a business such as HR or marketing professionals who could assist with those areas instead if their expertise doesn’t lie in them (or both!).
Starting, maintaining and growing a business takes a lot of hard work and careful management. The good news is that it’s all possible, so don’t get discouraged if your business doesn’t take off right away! With some careful planning, you’ll be able to build up a successful tech startup and keep it going for years to come. I am always rooting for you.
Yours in Financial Independence, Temitope.
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