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8 Financial Matters to Stay on Top of as a New Startup Entrepreneur

Updated: Apr 23

writing business accounting plans

You can have the best idea and a steady stream of customers eagerly lining up at your establishment, but bad financial management will always catch up to a business, no matter its size and field. Unfortunately, the giddy feeling that often comes from managing an exciting new startup often blinds fresh entrepreneurs to this reality until it’s way too late.

The good news is that startup failure doesn’t have to be your inevitable fate. If you have a solid concept underpinning your business, and if you’re disciplined about your financial housekeeping, success is almost certainly going to be a matter of paying attention to the small, but critical details. Let’s take a look at the crucial money matters you’ll want to keep a handle on if you’re in the early stages of running your own startup:

1. Cash Flow Management: The Lifeblood of Your Business

Where amateurs discuss sales, dyed-in-the-wool entrepreneurial veterans discuss cash flow. Over the long term, prioritising cash flow makes it possible to understand the real value that different operations bring to your business. More immediately, it lets you fine-tune your management of collectibles and receivables.

Doing both of these things well will help keep your doors open and prevent you from having to borrow cash to cover typical daily expenses, avoiding the downward financial spiral that often plagues first-time entrepreneurs. Fortunately, whether you’re in Wellington or down in Dunedin, accountants and other financial advisors will be available to help you understand your cash position.

2. Accessing Capital: Plan for Financial Flexibility

Though you don’t want to be in a position where you have to borrow cash to keep the lights on, you still need to make sure that that option is available to you if and when you need it. Keeping your funding options open can be key to grabbing ahold of often fleeting market opportunities and avoiding unexpected catastrophes.

Be sure to explore venture funding, private equity, government-provided small business loans, and lines of credit as options for when your startup might need a cash injection.

3. Separating Business and Personal Finances: A Cardinal Rule

Co-mingling your personal and business finances is a very serious rookie error that could directly expose you to legal liabilities. However, the reality of startup life is that such ties often cannot be helped. Regardless, aim to separate your personal and business finances as soon as you can.

4. Outsourcing Your Accounting: A Smart Move for Entrepreneurs

Unless you’re an accountant yourself (which is unlikely if you’re reading this), you should probably leave any financial activity that isn’t basic bookkeeping to a qualified accountant. Having a qualified accountant at your side will prevent you from overpaying or underpaying your taxes, ultimately keeping your startup’s finances in tip-top shape.

shaking hands with Dunedin accountant

5. Understanding Economic Cycles: Prepare for Ups and Downs

For a start, subscribe to news related to your industry and make time each week to read multiple perspectives on larger economic events, both in NZ and overseas, that can affect your startup’s operating costs. It may take a while to get a good grip on macroeconomics, but gaining an understanding of the subject should help you foresee events that are likely to impact your industry.

reading business accounting news

6. Marketing and Advertising Investment: Making Your Presence Known

Advertising in the startup world is getting to be a cut-throat business, so unless you’re careful, this area can be a huge black hole. To maximise your budget, explore creative marketing approaches that don’t require a constant influx of cash. Social media marketing, search engine optimisation (SEO), and influencer tie-ups are just some of the more affordable marketing strategies within reach of newer businesses.

7. Hiring and Retaining Talent: Invest in Your Team

Startups are effectively competing with larger corporations for talent, which puts them in a really difficult position when hiring talent. Still, you need good people to make your business grow the way you intend it to, and the only way you can consistently do this is to offer your employees a bigger share of your pie.

Competitive salaries, attractive benefits, and a supportive work environment are the bare minimum you need to attract and retain valuable employees in this day and age, so do what it takes to deliver all of these.

8. Staying Passionate: The Heart of Entrepreneurship

You probably did not build a startup because you enjoy managing your finances. Indeed, many entrepreneurs find that taking care of the little stuff can blunt the passion they once had. Sometimes the loss of passion can lead you to lose your edge, making you question why you’re even doing what you do in the first place.

To keep your passion burning, network with other business leaders and seek inspiration wherever you can. Seeing other people be passionate about their own work can be infectious and may give you the drive to go on and put your attention on even the difficult aspects of running your business, including your finances. Don’t forget that it’s also an option to direct most of your energy to tasks you love doing and delegating other areas to trustworthy team members who have the expertise.

Choose Your Financial Advisors Carefully

So long as you keep these financial areas well in mind, your startup will have a good chance at meeting its money challenges. The great thing is that there are plenty of resources out there for small businesses in New Zealand. If you’re ready to have your finances reviewed, be sure to choose localised accounting services like those of Target Accounting, a provider that truly understands Kiwi startups and small businesses.


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