If you are an entrepreneur who is just about to start your own business venture, you may already be aware of how many things you have to learn. In addition to getting up to speed on the multiple rules that are associated with running a successful company, you will find that much of your early focus is on financing. Without the funding necessary to set up and launch your new company, you’ll never get your entrepreneurial dreams underway.
One of the biggest lessons you come to understand about the entrepreneurial path is that all of your mistakes, all of your learning is paid for right out of your own pocket. When you work for a big corporation, lessons learned may hurt your pride, but they seldom cost you monetarily. The company you work for absorbs any costs associated with your real-life, on the job education. As an entrepreneur, you’ll quickly discover that it pays to learn ahead of time so you don’t waste your own money.
Budget and Track Your Expenses
It’s important to set up a simple system to track your expenses right away. Too many entrepreneurs make the mistake of comingling their personal and business funds, which can open them up to personal liability even if they are setting up a corporation. In addition to tracking your business spending, leading entrepreneurs also stress the importance of creating a budget for your new venture. This will allow you to project your expenditures and forecast revenues, as well as identifying projected cash flow requirements.
Set Up Cost Saving Measures Right Away
When you are creating your startup venture, you’ll find that everything seems to be hurtling past you at the speed of light. To keep control of your finances, it’s critical to put cost saving systems in place from day one of your operation. Fleet managers and trucking operations are finding that fuel cards for your fleet can help new companies track fuel consumption and set firm spending controls. These cards also offer significant discounts on fuel, and can help when it comes to IFTA reporting.
Reduce Your Living Expenses
As a startup, much of your initial funding is going to have to come from your own financial reserves. Banks will not typically lend to entrepreneurial startups because they prefer to see an established company with a proven track record and long-term profitability. In addition to leveraging your savings, you may want to consider refinancing your mortgage or taking out a second mortgage on you home to generate cash. Some entrepreneurs even raised money by renting out rooms in their home or listing their properties on an online booking service. Either of these approaches would reduce your living expenses and generate much needed cash.
Leverage Crowdsourcing Opportunities
If you have a brilliant idea for a new product or invention that is the basis for your startup, you could finance your entire operation with a successful crowdsourcing campaign. With crowdsourcing, you create a product listing and prototype and then introduce your great idea to the world. With a brilliant video, it will be possible to advertise your business and get a viral buzz going and attract a multitude of new visitors to your listing. They’ll be able to order the product and pay for it at special pre-production pricing, which will save them money and give you the funds you need to set up your manufacturing and fulfillment operation.