Startup life can be overwhelming. You’re up against impossible odds and the competition is relentless. But there is a way to keep your startup financially safe: create an accountability plan. A financial plan is a document that outlines the steps you need to take to manage your startup’s finances.
It should outline all of the areas where you have an obligation to pay taxes, pay bills, report income, and make other financial disclosures. This helps you stay on track and will help you manage your startup’s finances responsibly. Here are some helpful ideas for creating a successful crowdfunding strategy:
You need to be upfront and honest with your backers, investors, and clients about your finances. This helps you retain your backers’ trust and helps you create a more accountable financial plan. Once you’ve got your finances in order, you can start writing your crowdfunding plan. You can start small. For example, if you’re just starting out as an independent developer, a budget of $500 per month is enough to cover your initial expenses for a year. This can help you stay on track and make sure you don’t forget about your finances.
As your startup founder, you also need to keep your finances in-formed. It’s important to report your income and expenses every month to your employer and your bank. This helps you stay accountable to your finances. If you don’t know where to start, begin by putting your income and expenses on proper tax documents. Then, look up financial documents that relate to your business that you haven’t filed. Be sure to keep these documents in a safe place.
If you’re not keeping proper track of your income and expenses, you won’t have a clear financial picture. Keep your business payments on schedule. This is important because you don’t want to fall behind on your bills by a certain amount. If you don’t have a specific figure in mind, make sure to keep track of what you’re owed so you know exactly when to expect your rent or bills to be paid.
Don’t delay startup expenses
The best way to stay on top of your startup expenses is to keep them on schedule. This helps you avoid the “shutters” that can happen when you’re in the midst of a project and you don’t have a physical, written schedule with your contractor. It’s also helpful to keep track of who is funding your startup. This helps you stay on track, as you can see who you’re financing and who is deferring funding.
Create a budget
A budget is a collection of events and behaviors that help you stay on track. It should guide your spending, help you identify priorities, and help you understand your spending within a certain context. You can create a budget that breaks down your expenses into smaller categories, such as healthcare and gas bills, to make it easier to see what you need to cover. You can also use a budget to break down your income into smaller categories, too. This helps you stay on track with your spending, as you can see who you’re funding and who you’re deferring.
Set aside money for emergencies and lasting changes
If you need to make a break in between projects, it’s typically a good idea to set aside some money to cover the duration of the break. This helps you avoid overspending and makes you more accountable to your budgets. For example, if you’re working on a new app and your project requires you to spend a week in a different country, you could set aside $500 and leave the rest to your lucky benefactor. This helps you understand your spending and lets you know where to cut back next.
Have an online calendar where you keep your financials
You don’t need a printed financial document to use this calendar. You can use it online. You can easily assign tasks to yourself, change projects, and track progress. You can set up recurring events, set up recurring times, and create a calendar that is easily searchable.
As your startup founder, you need to cleanse your mind of all distractions and make time for necessary financial planning and management. You also need to Cultivate good financial hygiene.