October 14, 2015 0 Comments Build Your Empire

Financially Savvy Advice For Launching A Business

FullSizeRender

Money. We like the sound of it and I’m pretty sure we all want to make more of it but often, when starting a new business, cash (or lack thereof) can be something that holds us back.

 

We become petrified of losing money and s*** scared that we could be giving up a steady income to pursue a business which leaves us not knowing whether we will even be able to feed ourselves that month.

 

Lack of cash and financial instability are big reasons why many women don’t pursue business ventures but there are things we can do to make the transition from ‘employee’ to fully fledged Boss Woman a smooth one.

 

  1. Start saving NOW

If you are leaving a job, you are going to need some sort of financial buffer. Many businesses take a while to pick up momentum and there could be months in the beginning where you don’t make any money.

 

Many female entrepreneurs I’ve spoken with have said they’ve saved up enough to keep them afloat for at least the next few months, some as many as six.

 

Even if your business itself doesn’t require a huge amount of start up costs, you still need cash to survive. You don’t want to find yourself in a position where you are forced to go back to work as you need the cash. Save up enough money so that you have money to fall back on if business takes a while to pick up.

 

  1. Work out how much you NEED to LIVE.

 

Work it out as close to the pound as possible exactly how much you need to survive.

 

Take into account:

 

Rent/mortgage payments

Bills

Phone contract

Gym Membership

Food

Car insurance

Credit card payments

And anything else that you have to pay off monthly.

 

Then, start creating a saving plan that allows you to create a pot of money that will cover at least these basics for at least a few months.

 

Sarah of Unsettle.org also recommends that as well as saving a ‘quit fund’ that is enough to cover 3-4 months of living costs, we should also save for an ‘emergency fund’ so that we aren’t caught off guard by one off expenses we come up against.

 

  1. Start your business as a side hustle.

 

An unbelievable amount of boss women I speak with tell me about how they started their business whilst still in a job.

 

This helps ease the ‘Oh god what they hell am I doing’ moment of just quitting a job to throw yourself into something new.

 

A side hustle allows you to find your feet, test your business idea and allow for your business to gain momentum before you take the plunge and quit your job.

 

And yes, I know what you are thinking; ‘I work full time and barely have time to breathe as it is let alone start a business on the side.’

 

I’m not saying you have to go into full on hustle mode and work every hour god sends, but find areas of your life you are willing to sacrifice to make time for your new venture. (Yes, I’m talking about your current Netflix obsession.)

 

Also, starting your business as a side hustle doesn’t necessarily mean it has to be running as a full fledged business. Start with small manageable steps that will help your business get off the ground.

 

Use what time you do have and do what you can – set up a website, start a blog, start utilizing social media to generate awareness. Allow your business to pick up some momentum so that when you do make the leap into taking it full time, you don’t feel as if you are entering entirely new territory.

 

  1. If you have debt, keep working until you pay off the debt.

 

Having a debt lurking over us is only going to add to the stress of starting a business. You don’t want to find yourself in a position of not being able to pay your monthly repayments if in the early months your business doesn’t bring in enough money. Getting out of control with debt will not only cause you major anxiety, something you will no doubt already have by the bucketload as a new entrepreneur, but it could also negatively effect your credit score, something you will need to think of if you want to grow your business using a bank loan later down the line.

 

Get rid of debt before you make the full transition into being your own boss. Start your business as a side hustle (see above) and funnel the money you make from your business into paying off your debt.

 

  1. Always be thinking; ‘is this something my future self/business will thank me for?’

 

When first starting out in business, every little bit of cash helps. Yes, as tempting as it is to buy the shoes, as Sophie Amorosu states ‘money looks better in the bank than it does on your feet.’

 

Think about how that money could be used to help your business. You could get someone to design you a killer logo or you could use it for advertising. These actions could in turn generate more income for your business.

 

Hold off on celebrating financial gains in the early days by treating yourself to something extravagant. You never know what could happen further down the line and you may find yourself wishing you hadn’t spunked all your profits on a makeup haul.

 

Instead, be frugal with money you make in your business in those early days. Pour it into growing and strengthening your business and reao the (greater) rewards later down the line when your business is more stable.

 

  1. Put aside for tax

 

And anything else that was previously covered by your employer – health insurance, life insurance, your pension pot, holiday pay, sick pay.

 

Remember that if you go on holiday or are ill, no one is going to be covering you so keep some money aside for the months where you won’t be working as often or to make up for the times you are sick.

 

Taxes are super important. Figure out how much you need to pay and keep on top of your accounts so you aren’t in a mess and stung with an unexpected tax bill at the end of the financial year.

 

  1. Have an accounting system.

 

Following on from above, you need to have an accounting system in place to keep on top of your finances so you aren’t all over the shop when it comes to filing a tax return at the end of the tax year.

 

Keep track of where you are financially – your outgoings and in goings. You should pretty much know off the top of your head how much your business account has in the bank. Create a system that works for you and that allows you to keep on top of invoices, bills and all other money in/out.

 

Check out this link here for more accounting tips on getting your startup on track.

 

  1. Have a backup plan

 

Have some sort of contingency in place should your business idea not work out. Could you go back to work for a bit if needs be? Is there another way you could make some money if your business doesn’t succeed? Freelancing perhaps?

 

I know it’s putting a downer on things to think of NOT succeeding and whilst I’d love to say ‘of course we will all succeed’, chances are your first business idea may not be ‘The One’. In which case, reassure yourself with a ‘Plan B’. Ok, so having to go back into employment once you’ve had a taste of freedom may suck massively, but console yourself that if you’ve tried once you can try again. Learn from whatever mistakes you made and go back to the drawing board.

 

  1. Start small and grow organically

 

It’s tempting to think that we need to throw all of our savings into our business to make it a success and often this is why new businesses fail. Yes, money helps get a business off the ground, but a well backed business doesn’t always equal success and we should resist the temptation to pour everything we have into our business straight away.

 

Whilst we all want to dream big and often have big ideas for where we want our business to go, it’s a risky move to go in all guns a blazing without testing out your business model and seeing whether your product/service is something people would pay for.

 

A better idea is to start small and gradually pick up momentum, which allows you to make tweaks where necessary rather than having to correct huge errors further down the line which could cost you the big bucks.

 

Test your market, get feedback on your product/service – some aspects will be great, others may not sell or need tweaking. Make these changes and repeat the process. In doing this, you minimize the risk of pouring mega money into a product/service that isn’t quite right and no one wants to buy.

 

  1. Negotiate like a boss.

 

Hone in your negotiating skills. This works from two ways – the first from a buyers perspective e.g. products you buy for your business or services you require such as web desing/photography and the second, when negotiating how much you charge for your products/service.

 

When paying for goods/services for your business, don’t be afraid to try and get a reduction in the price – even if they just knock off a small percentage, it all adds up.

 

When setting your own prices, back yourself. Don’t be afraid of charging too much just because you are a new business – charge what your service/product is worth.

 

Sure, it may be difficult to command super high fees/prices before you or your product has gained credibility/popularity, but pricing yourself too low isn’t a solution. Find out what people would be willing to pay and go from there.

 

  1. Reach out to people in your circle who may be able to help out.

 

Have a friend that’s a web designer? Winning! Reach out to those who have skills that you can utilize. Hopefully if you smile sweetly enough they will do it as a favour or if not, you could to do something for them in return such as walk their dog or babysit their kids.

 

And on one fiinal not, remember that the early days of growing a business are always going to be the toughest financially; it will take time to build a steady income and get yourself used to having to having to forward plan. But if you are sensible with your cash, you will be laughing all the way to the bank in no time. Let me know how you are preparing yourself financially for launching your business in the comments below.

 

Believe & Be Awesome….

dani signature

 


Share: