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4 Money Hacks for Starting and Growing Your First Business

4 Money Hacks for Starting and Growing Your First Business

Starting a business is equal parts of excitement and anxiety. On the one hand, you’re ready to chase your dream. On the other hand, you’re worried about the ramifications of failure. It’s important that people understand how to put themselves in the right financial situation to be successful.

Do you know what it takes? Here are a handful of money hacks that have helped countless entrepreneurs get off on the right foot.

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1. Understand Your Loan Options

Very few people start and grow successful businesses without any sort of financial help. Some entrepreneurs need a little more assistance than others, but the majority of small business owners have some measure of help – and it’s usually financial in nature.

If you need some money to get your business going, it’s important that you understand your different loan options. At first, it might look pretty confusing, but remember that loans are like products. Each product has unique features and the goal is to find the one that best serves your needs. When it comes to term loans – which are often used to generate long-term growth – do your homework and understand the differences between secured/unsecured, short-term/long-term, fix/floating interest, and repayment options.

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2. Safeguard Personal Money

While there may seem to be little division between your work life and personal life, it’s imperative that you create some separation financially. If you’re running your business out of your personal bank account, you’re walking a very fine line.

Go ahead and open up a separate business account. It doesn’t matter if you’re spending small amounts or writing checks with lots of zeros, avoid co-mingling assets and you’ll sleep much easier at night.

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“Experts recommend opening a separate business credit card and business bank account as well as putting an accounting system in place to track your expenses,” says entrepreneur Jennifer Woods. “Accounting software such as QuickBooks is a good low-cost option but if the business requires more extensive expense tracking it might be prudent to hire a bookkeeper.”

3. Calculate a Break-Even Point

Knowing your break-even point – both on a monthly basis and overall – is extremely important. This allows you to make strategic choices that are based on the numbers, as opposed to decisions that are based on feelings and emotions. Once you understand your break-even point, you can shuffle things around until the numbers work. If you don’t know this tipping point, you’re essentially playing a guessing game.

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4. Have a Team of Advisors

“One big difference I see between startups that build a framework for success and those that get isolated is the ability to nurture talent,” executive Jyotsna Pattabiraman says. “Many startups believe that the way to get that expertise is by hiring a senior consultant. Yet others believe that they can figure it out through trial and error. Both approaches are expensive, one in terms of cash and the other in time.”

So, what’s the correct answer? Pattabiraman and others point to the need for an advisory board. Advisors are different from consultants in that they don’t come and go for specific projects or needs. They stay on board for the long run and will push you in the right direction. As a result, there’s a lot of continuity. And while advisors can help you with a lot of things, they tend to supply a lot of financial expertise, which can be invaluable in your pursuit of growth and stability.

Take It Easy

There’s nothing easy about launching and growing a small business, but it suddenly becomes a lot simpler when you understand how to approach the financial side of things. Think about these concepts and make sure you’re constantly reevaluating.

Featured photo credit: Chicago Tribune via chicagotribune.com

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Anna Johansson

Anna specializes in entrepreneurship, technology, and social media trends.

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Last Updated on January 21, 2020

How to Develop a Millionaire Mindset in 6 Simple Steps

How to Develop a Millionaire Mindset in 6 Simple Steps

We all like to dream about being financially wealthy. For most people though, it remains a dream and nothing more. Why is that?

It’s because most people don’t set their mind to achieving that goal. They might not be happy in their current situation but they’re comfortable – and comfort is one of the biggest enemies of growth.

How do you go about developing that millionaire mindset? By following these simple steps:

1. Focus On What You Want – And Take It!

So many people are too timid to admit they want something and go for it. When there is something that you want to accomplish don’t think “I could never actually do that”, think “I could do that and I WILL do that”.

Millionaires play to win, not to avoid defeat.

This doesn’t mean to have to become a selfish jerk. What it means is becoming more assertive and honest with yourself. You don’t have to grab off other people. There is a big pot of unclaimed gold in the middle of the table — why shouldn’t you be the one to claim it? You deserve it!

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2. Become Goal-Orientated

It’s almost impossible to achieve anything if you don’t set firm goals. Only lottery winners become millionaires overnight. By setting yourself attainable goals, you will get there eventually. Don’t try to get rich quickly — get rich slowly.

Let’s take the idea of making your first million dollars and expand on what kind of goals you might set to get there. Let’s also say you’re starting at a break-even position – you’re making enough to get by with a few luxuries, but nothing more.

Your goal for the first year can be having $10,000 in the bank within a year. It won’t be easy but it is doable. Next, you need to figure out the steps you need to take to achieve that goal.

Always look at ways to make growth before cutbacks. With that in mind, you might want to see if you can negotiate a pay rise with your boss, or if there’s another job out there that will pay better. You might be comfortable in your old job but remember, comfort stunts growth.

You may also have other skills outside of your workplace that you can monetize to boost your bank balance. Maybe you can design websites for people, at a fee of course, or make alterations to clothes.

If this is still not enough to make the money you need to save $10,000 in a year, then it’s time to look at cutbacks. Do you have a bunch of old junk that someone else might love? Sell it! Do you really need to spend $10 on your lunch everyday when you could make your own for a fraction of the cost?

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If you are to become a millionaire, you need to start accumulating money.

Here’re some tips to help you: How to Become Goal Oriented and Achieve More in Life

3. Don’t Spend Your Money – Invest It

The reason you need to accumulate money is for step three. Millionaires tend to be frugal people, and that’s because they know the true value of money is in investing. Being your own boss goes hand-in-hand with becoming a millionaire. You’ll want to quit your regular job at some point.

Stop working for your money and make your money work for you.

Rather than buying yourself a new iPad, that $500 could be used to invest in the stock market. Find the right shares (more on that later), and that money could easily double within a year.

There’s not just the stock market — there’s also property, and your own education.

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4. Never Stop Learning

The best thing you can invest in is yourself.

Once most people leave the education system, they think their learning days are over. Well theirs might be, but yours shouldn’t be. Successful people continually learn and adapt.

Billionaire Warren Buffet estimates that he read at least 100 books on investing before he turned twenty. Most people never read another book after they’ve left school. Who would you rather be?

Learn everything you can about how economics works, how the stocks markets work, how they trend.

Learn new skills. If you have an interest in it, learn everything you can about it. You’d be surprised at how often, seemingly useless skills, can become extremely useful in the right situation.

Start developing the habit of learning continuously: How to Create a Habit of Continuous Learning for a Better You

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5. Think Big

While I advise to start off with small goals, you absolutely should have a big goal in mind. If you have a business idea, then that is your ultimate goal – to start that business and make a success of it. If you want to invest your way to millions of dollars and do little work other than research, then that is your big goal.

There is no shame in not achieving a big goal. If you run a business and aim to make $1 million profit in a year and “only” make $200,000, then you’re still significantly ahead of most people.

Aim for the stars, if you fail you’ll still be over the moon.

6. Enjoy the Attention

To be successful, you have to be willing to promote yourself and enjoy the attention to a certain extent. Now the attention doesn’t need to be on yourself, it could be on your brand, but attention definitely attracts money.

Never be embarrassed to get your name out there. That means finding a spotlight and being brave enough to step right up underneath it.

If you run a business, try contacting the local papers. You’d be surprised at how amenable they often are to running a story about you and your business, and it’s all free publicity.

Above all, remember: You control your own destiny. Push hard enough for anything and you’ll get it.

More About Thinking Smart

Featured photo credit: Austin Distel via unsplash.com

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