Planning to start (or grow) your business in the new year? Be sure to read these financial tips from top business leaders.
Recently, the Young Entrepreneur Council (YEC) contacted top business leaders to ask the question, “What is one financial resolution all aspiring entrepreneurs should make for themselves in the new year?”
Whether you’re planning to start a new business in 2014 or grow an existing one, their advice is sure to get you going on the right foot. (Click here to Tweet this list.)
Read on for their tips:
Track your monthly income and expenses
“This might seem a little too basic, but if you’re not doing at least some bookkeeping on a regular basis, you don’t have your pulse on your business’s numbers. Being able to look at how much money came in and went out in one month is crucial to any startup or aspiring entrepreneur. Even if you’re not bringing much in, you need to know that.”
–Nathalie Lussier, Creator, Nathalie Lussier Media Inc.
Increase your rate of savings
“Becoming an entrepreneur can be a scary proposition, and one factor that keeps many people from making that leap is finances. If you’re living paycheck to paycheck, then it can be hard to make those tough decisions that may be rough in the short term, but very beneficial in the long term. Once you answer how you’re going to eat and where you’re going to live, you can then focus on your business.”
–Lawrence Watkins, Founder and CEO, Great Black Speakers
Can you really live on Ramen?
“It’s easy to assume that if you quit the high-paying day job, your expenses will decline in tandem with your income. In reality, that’s a lot harder after you’re used to nicer meals, vacation travel, etc. Before you quit your job, figure out what you can really live on for two months and test your ability to stick to that budget. It’s a great way to see if you’ll be happy living on Ramen noodles.”
–Erik Severinghaus, Founder and CEO, SimpleRelevance
Take an accounting class
“Even if you never have to do any accounting work at any company you ever start, understanding the basics of accounting will be very useful. Just being able to read accounting reports may save your bacon if there’s a potential issue in your company that your accounting software or a human accountant haven’t managed to pick up on.”
–Thursday Bram, Consultant, Hyper Modern Consulting
Create a personal budget
“Sometimes, amidst all the startup craziness, entrepreneurs forget to plan and organize their own finances at all. Then, all of a sudden, you’ve ordered expensive sushi delivery every night for dinner and the numbers keep stacking up. Take some time over the holidays to plan out your own budget.”
–Derek Flanzraich, CEO and Founder, Greatist
Join the peer economy
“The peer economy, companies that help you buy, sell, or transact with your peers (think eBay, Etsy, Airbnb, Getaround, Taskrabbit, Zaarly, Odesk or dozens others), is a great way to make money or save money. So participate — either by renting your couch out or staying in an Airbnb place when you travel, finding a developer or selling your services on Elance or more. But just participate.”
–Eric Koester, Co-Founder/COO, DCI
Give yourself permission to fail
“Every aspiring entrepreneur should give themselves permission to fail in 2014 because the greatest obstacle that every entrepreneur must (and always will) encounter is fear, and especially fear of uncertainty and the unknown. When you give yourself permission to fail — financially or otherwise — you really give yourself permission to try in the first place.”
–Dave Ursillo, Founder and CEO, The Literati Writers
Pay down debt
“If you have personal debt, try to dramatically reduce or ideally eliminate it prior to starting your business. Having lower recurring expenses will give you more freedom to take risks as you build your company. “
-Elizabeth Saunders, Founder and CEO, Real Life E®
“Establish a system to access financial data about your company’s performance on demand and in as close to real-time as possible. This will allow you to feel highly in tune with business growth and tackle challenges as early on as possible.”
–Robert J. Moore, Co-Founder and CEO, RJMetrics
Launch your company
“Too many people network, brainstorm and whiteboard continuously and just keep adding ideas and layers to their concept. Aspiring entrepreneurs need to draw a line and say, ‘This is our MVP, and now we will build it.’ Sitting on an idea does not help you or make you any money, but building your idea into a product or business will help you validate it and test the marketplace. “
–Aron Schoenfeld, Founder and CEO, Do It In Person LLC
Find great clients
“Improve profit through better clients. Having great clients really does matter in the overall happiness of a company. Make an effort to improve profits by taking on the right clients, not just more clients.”
–John Hall, CEO, Influence & Co.
Keep more of the money you make
“Keep more of the money you make! Strive to make sure that your costs are under control, make customers happier and focus on stimulating repeat purchases from new customers. That doesn’t mean becoming a penny-pincher, but if you have costs that aren’t advancing your bottom line, cut them out! A business is only as strong as the money it keeps at the end of the year.”
–Brian Moran, Founder/Director of Online Sales, Get 10,000 Fans
The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.