1. Your Time Is Worth More Than You Think
Bill Gates, one of the world’s richest people, famously plans each day virtually down to the minute. Why? Because even he, with almost infinite monetary resources, cannot buy time. While you’re probably no Bill Gates (yet), it makes sense to adhere to that same ethos.
In everything you do, ask yourself, is making your startup money? Is this customer wasting your time? Are you spending too much time on social media dreaming of that yacht? It all adds up, and you’ll never get that time back.
Schedule each week and day, and spend a few minutes at the end of each day reviewing how well you spent your time, and how you can improve your allocation of your time for the next day.
After all, time is your most important resource.
2. As a Startup, Keep Your Fixed Expenses Spartan
Another common trap for startups is spending too much time and money on impressing customers (and even friends) with big offices, new cars, and the best equipment. Entrepreneurs who have made this mistake will tell you that focusing too much on image is not only unnecessary, but that it can do considerable harm to your startup’s chances of survival.
Your focus as a startup should be your product or service offering and getting new customers — after that, everything will follow. So while you are just getting a foothold in the market, keep your fixed expenses as low as possible. Get that smaller office, lease a less expensive car, and just get the equipment you need (with a mind for growth).
With low fixed expenses, you can then allocate your capital to growing your startup’s revenue to become the larger success you believe it can become.
It’s certainly not a glamorous approach, but you won’t miss the new car you never had, and it will allow you to focus on what’s important — realising your startup’s vision of success.
Related Read: Why setting up a Singapore company is easy
3. Manage Your Cash Flow Like Your Survival Depends on It
The reason we word it this way, is that ultimately your cash flow is the be-all and end-all of your business’s survival. It’s very easy (and common) for fledgling startups to be so enamoured with their product or service that they either underestimate the importance of their cash flow, or worse, ignore it all together.
Once you run out of cash, it simply doesn’t matter how good your business idea is — it’s over, and there is no coming back. Thankfully there is a simple fix, and that is to be aware of every single dollar that comes in and out of your business. Make sure you know exactly what money is being spent on, and where money is coming from.
If you’re not a numbers person, that’s totally okay, but be sure to delegate either a staff member or professional service provider to take care of your accounting for you. If either of those are out of the question in terms of budget, there are plenty of online accounting platforms that will help you with your cash flow management.
Must-Read: How cloud-accounting software helps small businesses reduce work-load.
4. Customer Acquisition Is Your Startup’s Lifeblood
It may sound like we are stating the obvious here, but with so many things going on when you are building your startup, at times you might be distracted from your core task, and that is acquiring new customers.
Once you’ve picked the low hanging fruit, start to systematically explore other customer acquisition channels. A great place to start is customer referrals — the costs are minimal and word of mouth is proven to be the world’s most influential form of advertising.
Optimise and scale your approach to customer referrals, and then move on to other channels, such as social media and traditional advertising and marketing after that.
5. Plan for the Best, Prepare for the Worst
Sometimes clichés are clichés for a reason, and that’s because they are a fundamental part of the prevailing wisdom. In this case, well, stuff happens. The best entrepreneurs cannot predict everything that will happen in the future, so it would be a little more than arrogant to assume something won’t go wrong for a startup.
So when things do go wrong (and they will), be prepared by having some rainy day funds that can provide a cushion for any falls.
This would start from the very beginning — don’t quit your day job completely until you are absolutely certain your new startup will be able to sustain your current lifestyle.
Beyond that, keep emergency savings accounts, one personal, and one for business. That way when things go sideways, it’s not the end of your business endeavours.
Finally, you might be tempted to either pocket all of your profit, or put all of it back into the business. While the latter is more responsible than the former, there is a more prudent option, and that is to invest. Your first port of call should be to invest at least 10 percent of what you earn yourself into a retirement fund. Alternatively, you could look at micro-investing, or putting funds into an index fund.
6. Be Specific in Your Financial Goals
If you’re like a lot of entrepreneurs, you’ll be almost obsessed about your idea, and realising its value with your audience. So when it comes to setting financial goals for your startup, they might somewhat fall by the wayside.
With this mindset, you may have non-specific financial goals of “We will turnover 1 million dollars in our first year”. However that lacks definite and certain sub-goals of how and when to get there.
It’s okay to have those big, lofty, and general financial ambitions, but make sure you break it up into actionable, achievable milestones that are aspirational, but well within your grasp.
When you regularly hit the smaller goals, you will instill confidence in yourself that you are heading in the right direction, and down the path to the ultimate goal — a fully fledged, successful company.
Related Read: Why Singapore is a magnet for fintech companies
7. Make Sure You Pay Yourself Enough… but Not Too Much!
It’s always a fine line as an entrepreneur; do you pay yourself the bare minimum to focus on the growth of your startup business, or do you lavish yourself with your newfound financial independence?
The answer is of course somewhere in the middle, and only you can figure out what is the right balance.
You want to be able to pay yourself enough that you can maintain your usual lifestyle, or perhaps a little less lavish than that. There is no point in paying yourself so little that your personal finance-related stress affects your ability to work optimally for your startup’s success.
On the other hand, don’t go crazy on your personal expenditure. At least for the foreseeable future, keep your eyes on the prize of a successful startup, and in time, your personal financial success will manifest.
If you’re looking to create your own startup, we applaud you — it will be a tough road, there is no denying that. However, with the right knowledge and discipline you have every chance of immense success.
For that reason, we very much hope the free information we’ve given you here will help find the right track for success and stay on it.
As Singapore’s premier company incorporation service provider, InCorp absolutely knows how to maximise your chances of success when you start your new business. If you’d like any advice on building your startup, please do contact us, it’s both our job and pleasure to help.