How to Save Money During the Early Days of a Startup
Share This
There’s a lot of commentary on how to start a business, how to court investors, and how to sell a business. One theme that consistently falls through the cracks, however, is what it takes to, and what it is like to start up and run your own company on the ground level. For many young entrepreneurs, the thought of using investor money to help build your dream sounds like just like that — a dream. And while generating funding and starting out with a size-able amount of seed money can help a business get off the ground quickly, there are down sides to bringing others on board with the business that invariably will become ‘your baby’. If you have just taken the plunge, or are about to, and for those thinking about bootstrapping (even for business people that are just trying to save), I’ve laid down some tips that I’ve learned by doing, as a young entrepreneur and investor.
P&L / Project Costing
This is very important. Upon starting your business, it should quickly become apparent that you have some customers that are more profitable then others. Ones that take less time and generate more profit. Conversely, there are the customers that take more time, and generate less profit for you. Breaking down each customer into its own profit & loss (P&L) statement helps you understand who they are and what characteristics they have in common. Once you’ve identified the characteristics of the ‘high profit’ customers, you can then go after them. It’s worth spending the time to analyze your clients in a cost-benefit way, so that you can scale your business’s operations and your profits.
Generate Financial Reports Monthly
“What you measure gets managed” Peter Drucker once quipped, and that is why its important to review your financial reports monthly (if not more often). Much like it is important to monitor the profit/loss of your customer base, it is important to see where the money is coming and going each month. Many companies start out with several types ...
Related Articles
Categories: Uncategorized Tags: Amp, Cracks, How To Save Money, Lot, Money Help, Plunge, Profits, Young Entrepreneurs