Startup Basics – Financial Start-Up Basics

Startups require a solid understanding of the fundamentals of finance. Whether you’re looking to secure money from bankers or investors, key startup accounting records such as income statements (income and expenses) and financial projections will aid in convincing others that your business idea is worthwhile to invest in.

Startup financials usually boil down to a simple equation. You have cash or you’re in debt. Cash flow can be a struggle for young businesses and it’s crucial to monitor your balance sheet so that you do not overextension yourself.

As a www.startuphand.org/2020/09/09/financial-startup-basics-by-board-room/ start-up you’ll most likely have to find debt or equity financing to expand your company and become profitable. Investors will review your business plan, the projected costs and revenues, and the likelihood that they’ll get an investment return.

There are a myriad of ways to start a startup. From obtaining business cards with an introductory 0% APR period to crowdfunding platforms, there are a myriad of options. It is important to be aware that using credit cards or debt may affect your personal and company credit score. You should always pay off your debt promptly.

Another option is to borrow money from friends and family who are willing to invest in your company. This could be a great option for your company, but it is important to put the terms in writing to avoid conflicts and ensure that everyone is aware of what their contribution will mean for your bottom line. If you give someone shares in your business they are considered to be an investor. Securities law applies to this.