Many entrepreneurs share a common set of difficulties in their starting businesses depending on the size and scale of their startup. They are great at the specialist “technical” aspects of their profession but they often struggle with business development, which requires appropriate financial planning strategies.

There are millions of people out there who want to start their own business but do not know where to begin. With so much market competition, it may seem impossible to find success running a new business with little or no experience. Keeping your concern in mind, below are a few points that all entrepreneurs should focus on to grow their businesses with less stress:

1. Keep track of your finances

One of the common reasons why most startups fail is that they run out of money. Financial planning and management dictates success or failure of the business as skyrocketing sales and prospects of using latest technology backfire if fixed expenses are too high and you are investing funds in the wrong places. You can put your business in a risky situation if you do not stay on top of your cash flow. Most entrepreneurs do not consider operating costs and overheads while determining the cost involved in producing goods or services. Anticipating overheads and creating reserves for accommodating these expenses beforehand helps to save both money and time.

Hence, it is important to prepare budgets periodically (monthly or quarterly) to ascertain the actual operating costs. It is essential to include line items for each cost – from taxes to labor costs and rent paid for ensuring that all expenses (no matter how small) have been accounted for.

2. Minimizing fixed expenses at the initial stages

During the initial stages of your start-up, expenditure towards purchasing fixed assets has to be minimized for longevity. Although it is beneficial to have a dedicated office space for attracting customers, it also increases expenses towards purchasing new assets or developing infrastructure. You can consider working with virtual assistants and freelancers for completing simple tasks or consider a co-working space rather than paying rent.

Running a lean operation not only provides you flexibility but also helps to reinvest savings towards future growth prospects. It should be noted that investors may abstain from funding because of unwise financial decisions.

3. Have a backup plan

The recent survey reveals that a majority of small businesses fail due to cash flow problems, therefore, it is necessary to have a backup plan at the time of starting a business. Make sure that you do not quit your job as it is the main source of income for it usually takes two years for any business to become self-sustainable. Also, look for funding options like equity funding, applying for a business loan from a licensed moneylender or crowdfunding, depending on the business requirement.

4. Staffing costs

Hiring permanent staff and paying them a salary, bonus or holiday pay can be a big hole in your staffing expenses. If you are planning a startup, you have the option to outsource some of the admin tasks like business phone calls to a quality call answering service so that you can save money on overheads, such as procuring office furniture and other resources.

Apart from these points, the next thing you can do to manage small business finances is to invest in technology like using online software for keeping the records of your revenues and accounts. Also, with the advancement of technology, businesses can master the basics of accounting and ensure that financial records are maintained efficiently.