How Startups Can Tackle The Issue Of Cashflow Management

Cashflow management is one of the biggest issues for any business, even more so when you’re a startup and every cent matters.

I’ve given you three tips that will help you manage your cashflow and keep your business running smoothly. 

But I must give you a word of warning, though, these aren’t all cost-cutting exercises – you will have to a little spend money to save some cash. 

Use credit wisely 

Cashflow management is about controlling the balance between your ingoings and outgoings. The problem is that sometimes these two things won’t be in harmony – using credit wisely gives you the money you need to get the balance right. 

No startup owner gets into business to get into debt, but taking credit is part and parcel of the game – even the largest companies in the world manage their cashflow with credit. 

Government loans and business loans are long-term solutions to securing credit. One of the best short-term solutions is to use fuel cards. 

A fuel card is a credit card for the diesel and petrol you need to get to client meetings, visiting suppliers, or simply getting to the office. 

There are many options out there, such as the Texaco fuel card. This means that you pick the right one for your startup and using a price comparison site like iCompario helps you do this – you simply enter the details of your startup and it will find the card that meets your needs. 

Get an outside view 

It’s often thought that managing the money that’s coming in and out of your startup is something that only you can do – you’re the only one that understands the value of what you’re spending your cash on how much you’re billing for your work.

I disagree.

This is because you’re too close to what’s happening – you have a personal investment in your cashflow that makes it hard to make objective calls on what’s going on. 

Getting an outside view of your cashflow will give you a clear, unbiased assessment of whether your ingoings and outgoings are correct. 

Of course, it costs money to get an expert to check your finances. However, their knowledge can pay dividends – they may establish that you’re not charging the correct amount for your work, or that you’re overpaying for certain things. 

You can pick from a huge amount of finance experts. However, without knowing your startup I couldn’t begin to recommend one. My advice is that you speak to startup owners from your region and get some tips from them. 

Make smart hires 

While your startup may have begun as a solo venture (it may even be one right now) this won’t always be the case. And paying your staff is probably the biggest cashflow management issue you’ll ever encounter – you’re the person putting food on their tables. 

This makes it imperative you employ the right people and that it’s for the correct amount. 

A great way of being smart with your hires is to invest in graduates or people making career changes. This is because they’re hungry to succeed and just need an opportunity to prove themselves.

You can tie their salary increases to the success of your startup – this gives them the incentive to improve and you a great value employee, one who aids your cashflow management by staggering the cost of running your business. 

Of course, the key here is that you hire the right people. This means that need to have really clear understanding of your company values – something that sounds obvious but that you may take for granted, as it’s stuff you’re doing without thinking about. 

Recommended reading: How to Relax When Working from Home

Using credit wisely, seeking outside assistance, and making smart hires won’t solve all of your cashflow management issues – but they’ll deal with some of the most important ones. 

Put my tips into practice today and you’ll have a much firmer grasp on your startup’s finances, giving you a better chance of making it the success it deserves to be.