5 Ways You Can Keep Your Cash Flow Healthy as a Startup Owner

Introduction

I’ve been an entrepreneur for many years and have started multiple companies. While I love the freedom that comes with being your own boss, it can be a challenge to keep your cash flow healthy. In fact, it often feels like there are more expenses than income when you first get started. But if you’re smart about how you spend money during the early days of running your business, then things will start looking up very quickly!

Create a budget and stick to it.

Create a budget and stick to it.

You can’t keep your cash flow healthy if you don’t know where your money is going. Create a budget and use it as your spending guide. You’ll want to look at all of your expenses and income, including rent or mortgage payments, utilities, groceries, etc., but focus on what’s most important first: paying down debt or building an emergency fund. Once you have this sorted out, you can start focusing on other things like travel expenses and meals out with friends or family members—but never spend more than what’s in the envelope! If you want more tips on creating a budget that works for you check out our post 10 Steps To Creating A Personal Budget That Works For Your Startup Life here!

Don’t overspend.

One of the biggest mistakes you can make as a startup owner is to overspend on things that don’t generate revenue. This is especially true when it comes to marketing, advertising and events. You don’t want to spend money on things that don’t directly earn your business money.

Here are some examples:

• Don’t spend too much on marketing if your business isn’t ready for it yet. The main goal of marketing is to build awareness about who you are and what value you offer customers. If people aren’t aware of your company yet, there’s no point in spending a lot of money on advertising until after they’ve heard about it from others or searched for it online themselves (or even better—until they’ve gotten into contact with one of their friends or coworkers who has already heard about the company). Then once they have been exposed before spending any money at all? Now’s the time!
• Don’t spend too much on an event if no one will come because nobody knows about it yet (see above).
• Don’t spend too much on travel costs until after launch date so you’ll know whether or not there will be visitors coming by surprise while away from home base; then plan accordingly with either public transportation options or renting cars nearby instead if necessary (but only if those choices are still affordable).

Be realistic about your expenditures.

The next time you’re out shopping, take a look at your list of priorities. Are there any items that aren’t on there? If so, do you really need them? If not—if they’re just things that catch your eye and make you want to buy them—consider passing on them altogether.

In the same vein, be careful when making impulse purchases. While it’s true that no one is actually able to resist buying something when it catches their eye in a store (or on Instagram), if it doesn’t fit into your budget or otherwise aligns with one of your core values as a business owner, then don’t buy it!

Make use of tools that can help you organize your finances.

As a startup owner, it’s important to stay organized. There are plenty of free tools that can help you do this.

• A budgeting template from Excel will allow you to see how much money is coming in and going out so that you can make sure that your business has enough cash on hand at all times. The best part? It’s free!
• A more mature cash flow management tool will let you know when money is coming in, is due or being paid out, so that there are no surprises (or late fees). A tool DIY recommends to keep visibility  on all things money is Quickbooks!
• Using a credit card instead of cash might seem strange but it’s actually better for tracking expenses because only one line item shows up in the statement—the cost of what was purchased—instead of several separate items if using cash or check.
• If none of these options appeal to you, use an Excel spreadsheet as your tracking tool! It may be old school but having everything organized in one place makes it easy to keep track of every penny spent and earned!

Reduce your expenses wherever possible.

• Save money by using a tool like Mint.com or YNAB (You Need A Budget). These tools will help you track your spending and make sure that you’re not overspending on anything.
• Use a credit card with a low interest rate to buy things you need, such as inventory or office supplies. Then pay off the balance in full each month, so that the only thing you are paying interest on is the actual cost of what it was that you bought (and hopefully not much more than that).
• Make sure that your company has an emergency fund in case something unexpected happens like losing a big client or having to replace expensive equipment quickly due to damage caused by water damage from a burst pipe in your basement office where all of your inventory is stored (yes, this happened to me once). An emergency fund should have enough money saved up so if something like this happens, there will still be enough left over after paying for everything else needed until business picks back up again instead of going into debt while trying desperately just survive long enough until things get better again without getting behind financially because they don’t have any extra cash lying around waiting for them when needed most urgently during those tough times when every dollar counts towards keeping afloat successfully through thick & thin!

Running a startup is expensive, but with these tips you can keep it from getting out of control

Running a startup is expensive. Between hiring new talent, paying for office space, and buying new equipment, it feels like there’s no end to the costs involved. If you don’t have enough cash on hand to cover these expenses, your business could hit some serious roadblocks—or even go under completely.

The key is to manage your cash flow as best you can so that you have enough money coming in while also keeping costs down where possible. Having consistent visibility on your expenses, and the overall financial stance of your business is key. A tool DIY recommends to keep visibility Quickbooks!

Conclusion

As you can see, there are plenty of ways to keep your cash flow healthy. The best part is that they don’t have to cost you anything! Even if you don’t have a lot of money right now, there are free apps and websites that can help manage your finances so that they don’t get out of control. Remember: only spend when necessary and never overspend on things like food or entertainment unless absolutely necessary.