4 Tips for good financial management
Good financial management?is just as important and finding a good product makes fit.?It's a bold move to start a small business, and not just because it's the hardest you will ever work. 90% of all startups fail, and most of those non-starters fail to get off the ground because of poor financial management. So give yourself the best chance of being that one in 10 exception with the following four tips:
1. Focus on what you know
You're in business because you had an idea and you're good at something. Spend your time doing what you're good at, rather than trying to take on the task of financial management all by yourself and not doing a good job of it. By hiring a Virtual CFO, you can concentrate on the strategic direction of your business, the product, and giving the customer what they want.
2. Don't underestimate?good financial management
It's tempting to think that running a business is mainly about having a great product or a service that people want. The numbers are just the numbers. But most successful businesses will all have had first-class financial management from the beginning. One entrepreneur might take an overly conservative attitude to growth, while another will be more prepared to take big risks to get rich quick, so an expert who is able to moderate those extremes could make the difference. Recognise that 'financial management' is much more than just the boring numbers: cash flow, debt, a focus on profit margins and not overtrading are quite literally the difference between success and failure.
3. Don't wait to succeed
Even if you recognise the importance of those numbers, a common strategy is to start off small and plan for a CFO when the business is able to afford it. Again, businesses that successfully scale do so only because the right plan to succeed was there from the beginning, while those who fail often tried to professionalise their financial management too late.
4. Give yourself the best chance
If you're yet to be convinced of the importance of good financial management, rest assured that people and institutions that will be crucial to the growth of your business know exactly how vital it is. So when you're trying to raise money from investors or borrow from an institution, they are going to want to be reassured that you are managing their investment properly from a financial point of view.