Business Tips

5 Financial Tips for Entrepreneurs Launching a Startup

5 financial tips for entrepreneurs that desire to launch a startup
Reading Time: 2 minutes

Are you an entrepreneur planning to launch a startup this period or thereafter? You need to pay rapt attention to these top 5 financial tips.

While there are hundreds of startups that launch each year, only a select few are able to make it past the second year. Statistics has it that 50% of small businesses fail after five years in business.

One of the main reasons why so many startups fail in their first year of operation is down to unwise financial management by new entrepreneurs or cash crunch.

Related: Launching a New Product? Here Are 6 Creative Ways to Promote It

If you’re about to run your own business, being in control of your finances is crucial. With that in mind, here are 5 financial tips that can benefit you before launching a startup.

Underline Your Business Costs

When creating a business plan, it’s important that you have a section that is dedicated towards accounting and finance. This section should clearly detail the different expense areas that are linked with running a company.

No matter what kind of business you plan to run, the major expense areas tend to include legal costs, staffing costs, marketing costs, and business insurance. If your business will be run in a brick and mortar establishment, make sure that you factor in establishment and infrastructure costs.

Create a Budget

Once you have pinpointed the different expense areas for your startup, your next step should be to devise a budget for each. When setting a budget, it’s advised to lay out 3 columns for each expense area, which are primary, urgent, and extra.

Related: How to Ensure Your Work Projects Are Completed On Time (and On Budget)

The main purpose of a budget is to create organization and structure in your management, helping you to oversee your finances to ensure you stay within your means. If you need quick funds to keep your business running, there are several types of loans that may be of interest to you.

Educate Yourself

Finance is a serious aspect of any business that you need to be knowledgeable of. To begin, you should learn crucial terms like interest, budgeting, state tax, and soft inquiry. Knowledge is power, so sifting through columns and articles on finance allocation, financial management, and expense areas can teach you everything you need to know. To enhance your knowledge further, there are numerous podcasts and webinars that can help.

Learn How to Save

Once you’ve drawn up financial budgets, you should also learn how to save. If you find yourself in a sudden emergency, having funds behind you can take the weight off your shoulders.

There are lots of great money saving tips that you can use as a business, such as opting for a shared working space to help save on rent, as well as using virtual networking software such as Skype to engage with clients, which will save space and money.

Improve Your Credit Score

As a startup owner, getting sound funding from investors should be your number one concern. It’s advised to keep an eye on your credit score each month, especially as investors tend to prefer startups with high credit scores. The better your score is, the more credible your operation, so if your credit score needs a boost, speaking to a financial advisor can help.

Related: 3 Sure-Fire Ways to Improve Your Credit Score

To avoid falling into the startup statistic, take all the tips listed above onboard. 

(Visited 115 times, 115 visits today)
Emenike Emmanuel
I am a multiple Award-winning blogger, CEO of Entrepreneur Business Blog, Chief Evangelist of Ebusinessroom Ventures, Lead Coach of The Excellent Entrepreneurs' Network (TEEN) and Convenor of #NaijaSitUp. My business is to help you start, manage and grow a profitable and sustainable business using digital marketing strategies. I have been featured and mentioned on platforms like, BloggingTips, StarterStory, StatusBrew, Realty Times, Emerald TV, SmartBCamp, Blogging from Paradise, Write Worldwide, Enterprise Boom, Atang Magazine, etc. In 2019, my blog won the Best Digital Media Award from AB Afrikpreneur. When you want to hire a professional to handle your online marketing, I'm your go-to-expert you can speak to. In 2019, I won the Blogger of the Year from the Global Excellence in Marketing Awards, USA and my brainchild, EBB won the Best Digital Media Award at the AB Afrikpreneur Awards. You can connect with me on Facebook, Twitter, Instagram, Pinterest and LinkedIn with this handle, @EmenikeNg

You may also like

5 Comments

  1. This article would be a lifesaver for budding entrepreneurs. I have personally witnessed many startups failing? The reason is poor financial planning. Startups can march into the growth phase only if there is perfect financial planning.
    Keep sharing good ones

  2. Finance is the area which is a big task for startups. Thanks, for the tips it is really informative and helpful
    Keep sharing more.

    Thanks & regards
    Sathish

  3. This is quite great blog for starters who are just starting up their businesses it is a really great guide

  4. The tips on finance is very good and simple and informative easy to understand.

    1. Hello Manoharan,

      Thanks for stopping by.

      I appreciate your kind words.

      – Emenike

Leave a reply

Your email address will not be published. Required fields are marked *