Startup Basics – Financial Start-Up Basics

Startups need to have a good understanding of the financial basics. When you’re trying to get funds from bankers or investors essential startup accounting records like income statements (income and expenses) and financial projections will aid in convincing others that your business idea is worth investing in.

Startup finances often boil down to a straightforward equation. Either you have cash or you are in debt. Cash flow can be a problem for young businesses. It’s essential to watch your balance sheet, and not overextend yourself.

As a startup you’ll probably need to seek out equity or debt financing to expand your company and ensure it is profitable. Investors will usually look at your business model along with projected revenue and costs, and the likelihood of earning a profit from their investment.

There are many options to bootstrap a startup such as obtaining an enterprise credit card that offers APR that is 0% to crowdfunding platforms for a brand new business. It’s important to remember that using credit cards or loans could negatively impact your credit scores. It is essential to pay your debts in time.

You can also borrow money from family and friends who are willing to invest. This is a good option for your business, but you must always put the terms of your agreement in writing to avoid conflicts and ensure that everyone is aware of what their contribution will impact your bottom line. If you give an individual shares of your company, they’re considered to be an investor and therefore need to be governed by the law of securities.

www.startuphand.org/2021/12/17/financial-startup-basics-fundraising-tips/