IF YOU ARE A START-UP, HERE ARE THE WAYS YOU CAN ENSURE SMOOTHER CASH FLOWS:
CASH FLOW FOR STARTUP IS AN IMPORTANT FACTOR IN THEIR SURVIVAL.
9 out of every 10 startups fail. The majority of startup failures remain concentrated within the first two years of a kick-start.
Startups need not just an idea or a plan to run, requires funding and proper Cash flow management
Why do startups fail?
According to Forbes, 9 out of every 10 startups fail. With the newest insights into play, technological advancements have driven a race that every entrepreneur wants to win – that as well at earliest. With success stories in the making of startups writing golden history, the fresh talent today tries to test their luck into putting its ideas into business.
Entrepreneurs having ideas that can be put to business are not enough to lead to success. With proper planning for the operation, liquidity, and cash flow are essential points to consider. According to a study by US Banks, 82% of smaller businesses tend to fall prey to failure due to cash flows.
Which entrepreneur would want to see his startup fail? The answer is NONE. This piece will help you with ways that a startup can smoothen out its cash flows to ensure liquidity is appropriately managed.
Here are the 5-ways to help gain cash flow for startup and keep surviving:
1-Planning out resources through cash flow for startup budgeting
Every business has cash in-flows and out-flows. Cash flows must be matched, and any material out-flows are managed with future cash receipts.
2-Do not add what you do not need
Excited fresh entrepreneurs often tend to spend on such overheads that a business does not need. This includes adding excess staff on payroll. Unless required, startups should always be looking to control their costs and out-flows to ensure no extra pressure comes on board to cash flows.
3-Request upfront payments, offering bulk discounts
Given that there is a demand for the startup’s offered goods/services, entrepreneurs can always look forward to offering discounts on bulk orders with upfront payments. This is the easiest way of having the required cash flows to fund operations.
4-Funding your invoices
Let’s assume the customers do not hold enough trust (yet) to make upfront payments. It is never too late to opt for “funding your invoices”. It is not necessary that if your invoices are paid after a wait-period, your growth has to wait too.
LENDO* offers invoice funding (also referred to as receivables financing) to SMEs and startups where they can opt for receiving instant cash for the receivables that are to be collected later. This way of smoothening out cash flows is becoming much embraced due to offered convenience.
5-Have funding ready
Capitalists are always on a hunt to fund startup (s) in distress. As a last resort, you can have such preparations done in advance that if in case your startup runs into trouble, you have an option available to save the venture. Acting at the eleventh hour may lead to higher stakes being endangered.
If you are an entrepreneur running a startup or SME, LENDO should be on your request-list already!
*LENDO is a KSA-based platform making SME based financing easier for businesses to meet their cash flow problems. Providing opportunities to startups to put their cash flow issues aside and focus on real growth, LENDO has already managed to make an impact. To get funding from Lendo, visit here.