You know what they say…starting up a business can be a risky thing. Statistics show that that 50-70% of most startups do not make it past their first 18 months in business, and trying to ensure that your startup doesn’t fall into that boat can be a stressful, daunting task.
Luckily, we are here to guide you on ways in which you can avoid becoming a statistic, and instead, have a startup that thrives not just financially, but on all levels. To find out more, keep on reading our guide to keeping your startup out of the red.
1. Do Your Homework
Like everything else in life, you need to start off doing your homework. Rome wasn’t built in a day, and neither are successful businesses. Before even embarking on starting a new project, you need to ensure that you have done all the research that is required of you.
You need to ask yourself questions such as “will I be able to pay off a loan?” and “how will a loan affect my cash flow and budget?” A good way to find out all that you need to know is to consult debt consolidation loan providers like Latitude Finance, who will give you all the information that you need and can guide you towards the path best suited for you and your potential business.
2. Create A Budget
Once you have done all your research and have found a loan you are confident you will be able to pay back, the time has come for you to get your budget sorted out. A budget will help you develop a strategy to pay said loan back, and this is of utmost importance if you want your business to thrive in the long run and not run into debt.
You can seek the help of a professional to do this, or you can take some time and learn how to do it yourself. Whatever your choice, make sure you get those budgets done!
3. Only Use Your Load For Revenue Generating Activities
It is so important that you use your loan only to finance revenue generating activities. This means not touching it for personal expenditure or assets such as computers and other office necessities. The best advice we can give you is that you should use borrowed funds only for revenue-generating activities and essential expenditures. Nothing else!
4. Create Side Income
Let’s be totally honest here – a startup isn’t going to earn you big bucks immediately. If anything, it’s going to take a long while for your business to start generating profits. This is why creating side income is essential. You could choose to do something as simple as selling products on eBay, or perhaps even apply for some part time jobs on the side.
Whilst this may seem like a nightmare, do remember that these are the small steps you can take to ensure that your ultimate dream of having a successful business comes true. The extra dollar you make can assist in covering expenses until you can get your business off the ground.
5. Prioritise, Prioritise, Prioritise!
Lastly, it is so essential that you prioritise. You need to prioritise which bills you pay first, which expenses you are going to make before others and what is most important to you financially. This means keeping taxes and payroll at the top of the list, and minimising credit card expenses or other expenses that may not be so important at this current moment. Whatever it takes to keep yourself out of the red, do it!
With these handy tips in your arsenal, we are certain that you will be one step closer to achieving your dream of a successful and long lasting business.