Fundamentals of financial startup are the ones that every startup should know to ensure their financial health and to secure the funding they need for growth. Nine out of ten failures in startups are caused by insufficient knowledge of these vital elements. Cash flow is the main reason. Without an understanding of how to monitor and forecast cash flow, a startup will not be able to manage its budget or invest in growth.
Investors need to see your startup’s financial projections as well as income statements. These models have to be calculated carefully to accurately reflect your company’s economics. This includes easy-to-overlook costs like shipping, taxes and insurance, processing fees and utilities.
In the beginning, startups can obtain financing from family and friends if traditional lenders aren’t an option. However, in this scenario it is crucial to write any loan conditions in writing so that there aren’t any conflicts regarding repayment obligations or expectations for future performance.
Startups may also seek venture capital from crowdfunding platforms or private investors such as Kickstarter. These types of financing usually require a business plan which includes a complete financial forecast. You can gain a better understanding of your company’s finances by creating models. This will allow you to make informed decisions on how much capital to invest and what strategic goals to achieve over the next year.
www.startuphand.org/2021/12/17/financial-startup-basics-fundraising-tips/