Abisola J.’s Post

❌💶 It is definitely better to start a startup without money! Let me tell you about my experience and why I think starting without capital can be a great advantage. 💡 Those without money find low-cost alternative solutions: When I started my first startup, I had no financial resources. This prompted me to look for creative and alternative low-cost solutions. I learned to make the most of every opportunity and find innovative ways to solve problems. 🙄 Those without money learn to manage finances in a healthy way: Without a large budget at my disposal, I had to learn to manage finances extremely wisely. Every expense was carefully considered and every financial decision was made with the utmost caution. This taught me the importance of financial discipline and long-term planning. 👂 Those without money seek market feedback more quickly: Having few resources, I was forced to launch the product in the market as early as possible to get real feedback from customers. This allowed me to see right away what worked and what didn't, and to adapt quickly to market needs. The speed with which you get feedback is crucial to continuous improvement and growth. 🤔 When you generate your first cash flows, you use money effectively: When I finally started generating my first cash flows, I was already used to managing resources sparingly. This allowed me to use money much more effectively, investing only in the areas that really needed it and could guarantee a return on investment. 🫤 Basically, those who have money and don't know how to manage it ... waste it, while those who don't have money have to learn how to generate and manage it if they want to grow in a healthy way. What do you think? Let me know in the comments! ⬇️

3 Financial Tips That Can Make or Break Your Startup Starting a business is tough, and managing your money right from the start is crucial. Here are three practical financial tips to help your startup succeed. 1. If you pay your suppliers too quickly, it can hurt your cash flow. Try negotiating for longer payment terms. For example, instead of paying in 30 days, see if you can extend it to 60 days. This gives you more time to manage your cash better. 2. Budgets can quickly become outdated, especially in a fast-moving startup. To stay on top of your finances, update your financial forecasts regularly, like every month or quarter. This helps you keep track of your money and adjust your plans based on real-time data. 3. How you mix debt and equity (borrowed money vs. investor money) affects your financial health. Make sure you’re not relying too much on loans or investors. Find a balanced mix that supports your growth without straining your finances. By negotiating better terms with vendors, keeping your forecasts up-to-date, and balancing your funding, you can avoid common pitfalls and set your startup up for success. Have these tips helped your startup? Share your thoughts in the comments! #finance #startup #management #funding #entrepreneurship

Cash Flow Management for Startups: Strategies for Staying Liquid Effective cash flow management is essential for the survival and growth of startups. Let's explore practical strategies to help your startup remain liquid and thrive. The Importance of Cash Flow Management CB Insights' 2021 analysis of over 110 startup post-mortems revealed that 38% of startups failed due to poor cash flow management. This underscores the critical need for startups to manage their cash flow effectively. Common Cash Flow Issues Overestimating Revenue: Many startups overestimate their potential revenue, leading to cash shortfalls when projected income doesn’t materialize. Underestimating Expenses: Startups often underestimate operational expenses, quickly draining available funds. Delayed Receivables: Payment delays from clients can create significant cash flow gaps. Poor Financial Planning: A lack of thorough financial planning and forecasting leaves startups unprepared for financial challenges. Strategies for Effective Cash Flow Management Maintain a Cash Reserve Establishing a cash reserve can provide a buffer against unexpected expenses and revenue shortfalls. Jason Lemkin, Founder of SaaStr, emphasizes the importance of monitoring the burn rate and maintaining a conservative approach to spending. Regular Financial Forecasting Conducting regular financial forecasts helps anticipate cash flow needs and adjust strategies. Brad Feld, Co-founder of Foundry Group and Techstars, notes that understanding the story behind the numbers is crucial for navigating uncertainty. Efficient Accounts Receivable Management Implementing strategies to accelerate receivables, such as offering early payment discounts, can improve cash flow. Laura Behrens Wu, Co-founder and CEO of Shippo, shared how stricter credit policies and early payment discounts helped stabilize their cash flow. Expense Control Regularly reviewing and controlling expenses helps maintain a healthy cash flow and avoid unnecessary expenditures. Inkle, a financial technology company, likens expense categorization to organizing a financial closet, essential for accurate financial planning and informed business decisions. Conclusion Effective cash flow management is crucial for creating a stable financial environment where your startup can thrive. By implementing these strategies, you can better manage your cash flow, avoid common pitfalls, and establish a solid foundation for long-term success. Richard Branson: "Never take your eyes off the cash flow because it's the life blood of business." #StartupSuccess #CashFlowManagement #Entrepreneurship

Start-ups can truly soar! 🚀 Planning your journey meticulously can be the difference between taking flight and staying grounded. Remember, the right route and the diligence in preparation bring your entrepreneurial vision to life. Let's transform ideas into impact together! Tatenda Machabe

In the whirlwind of startup culture, cash flow remains king. For any budding entrepreneur or seasoned business owner, understanding and managing your startup's cash flow can make or break your enterprise. It's not just about how much money is coming in; it's about when it arrives, how it's allocated, and ensuring there’s enough to cover the outflows. The timing mismatch between receivables and payables often poses a grave challenge but also presents an opportunity for strategic financial planning. Embrace technology to forecast, monitor, and manage your cash flow effectively. Leveraging tools can provide real-time insights into your financial health, enabling you to make informed decisions swiftly. Remember, a startup thrives not just on innovative ideas but on its ability to sustain operations financially until profitability is achieved. Let this be a call to action for all startups: Prioritize your cash flow management as if your business depends on it—because frankly, it does. Your innovation deserves a fighting chance; grant it one by mastering the art of financial flow.

Sneaky ways that your startup is burning cash. 🔥👀 Managing burn isn't just about managing your expenses. There are many other ways that your startup is burning cash. As a startup CFO, I see this challenge with many of my clients and provide them with tangible ways to improve their cash burn. Here are some examples that you can take action on today: ⌛ Taking too long to collect invoices: any time you make a sale, the money you earned is in your customer's bank account. The quicker you collect cash, the more you have to grow. 💲Not charging enough: many early stage startups struggle with this, especially when selling to enterprise customers. Software should have 80%-90% margin, products around 50%-70%. ⚖️ Expensive acquisition costs: how much does it truly take to get a prospect and convert to a customer? Make sure the annual value of their revenue exceeds that cost (ACV > CAC) for sustainable growth. 🚫 Low retention/High churn: the more customers that leave you, the more that you have to re-acquire just to stay at the same sales levels, and thus, re-acquire new customers. In addition, upselling an existing customer is more efficient than a new customer. 🐢 Delay your payables: if a company is giving you 30 days to pay, why pay today? Try and find ways to extend payment terms with any vendor. While you need to pay it, by managing your payables, you can extend your cash balance. While there are many more ways to extend cashflow, these are some of my top strategies. Happy scaling! 🚀

this is how you can maximise your funds (just a strong "business plan" is not gonna help) If you want to stand out, you have to do more, I agree "Business Plan" is crucial, but it’s not everything. Here is how you can stand out in cash flow management and maximizing startup funds: ✅ Regularly Review Financial Statements Review your financial statements regularly to understand the financial health of your startup. Here is how to do it: ➖ Set a schedule and stick to it  ➖ Make adjustments based on what you find  ➖ Learn to understand your financial statements ✅ Implement a Cash Flow Forecast: A cash flow forecast can help you predict future cash inflow and outflow. Here is how to do it: ➖ Understand your current cash flow  ➖ Predict your future cash flow  ➖ Regularly update your forecast ✅ Monitor and Minimize Spending Keep an eye on your spending and try to minimize it where possible. Here is how to do it: ➖ Review your expenses regularly  ➖ Look for areas of unnecessary spending  ➖ Implement cost-saving measures ✅ Maintain a Cash Reserve: A cash reserve can provide a buffer in times of financial uncertainty. Here is how to do it: ➖ Determine how much you need in your reserve  ➖ Regularly contribute to your reserve  ➖ Only use your reserve in emergencies ✅ Use Technology to Your Advantage Technology can automate and simplify cash flow management. Here is how to do it: ➖ Invest in financial management software  ➖ Automate as many financial processes as possible __ PS: So, which one is your favourite strategy to maximize your startup funds? #CashFlow #StartUpFunds #FinancialManagement #StartUps #Entrepreneurship

Fueling Your Startup's Launch: The Roadmap to Securing Funding 🚀💡 Navigating the path to securing funding is a pivotal step for startups poised for takeoff. Many of you have been curious about how to unlock the financial resources necessary to propel your vision into reality. Here’s a strategic guide to ensure your startup secures the funding it needs: Understand Your Financial Needs: Begin with a deep dive into your financial requirements. Assess your business plan, projected expenses, growth trajectories, and goals. This initial step is crucial for determining the size and type of funding you need. Build a Strong Credit Profile: Your startup’s creditworthiness is key. Ensure you've established a solid credit history through timely payments and responsible credit management. A healthy debt-to-income ratio will significantly boost your loan approval chances. Select the Right Lenders: Not all lenders are startup-friendly. Seek out those with a track record of working with startups. This can enhance your chances of finding a financial partner who understands the unique challenges and potentials of early-stage businesses. Craft a Convincing Loan Application: Your loan application is your opportunity to shine. Develop a comprehensive presentation that highlights your startup’s potential. Include your business plan, financial projections, growth strategies, and anything else that can make a compelling case to lenders. By meticulously evaluating your financial needs, building a strong credit profile, choosing the right lenders, and presenting a persuasive loan application, your startup can significantly increase its chances of securing the necessary funding. This process not only opens up financial avenues but also lays the groundwork for sustainable growth and success. Have you embarked on this journey, or are you in the planning stages of securing funding for your startup? Share your experiences or seek advice by engaging below. Let’s navigate the exciting journey of startup growth together! #StartupFunding #BusinessGrowth #FinancialPlanning #Entrepreneurship

Hey founder, check out these 6 wealth management tips that can help sustain your business in the long-run: https://lnkd.in/dQi_wXJQ #blog #aidi #wealthmanagement #founders #startup #tips

How often do you get to hear that a service based start-up got funding!! Yes it is a hard truth that service based companies find it rather difficult to secure funding. Why? Let us look at some of the hurdles- 1. Proving Scalability: Service based company can depend on a single or handful of people to provide services. Thus investors often doubt whether service-based businesses can grow big. It can be hard to convince them you can scale up. 2. Lack of Physical Assets: Service start-ups usually don’t have many tangible assets like property or equipment. This makes it difficult to provide collateral for traditional bank loans. 3. Validating Revenue Model: Showing a sustainable and recurring revenue model can be tricky, especially in the early stages when your business is still finding its footing. Service based business can pick up immediately or sometimes can take to scale up. 4. Talent Acquisition: Service based company relies heavily on talent. Investors may worry about this dependency and the attrition. Hiring and keeping top talent in a competitive market can be risky. 5. Competition from Established Players: Convincing investors you have an edge over well-established service providers can be a tough sell. Service depends on brand value a lot, thus customers weight towards going for a known name rather than a new player. Despite these challenges, many service-based start-ups have successfully secured funding. They do this by crafting strong pitches, showcasing innovative business models, and demonstrating a deep understanding of their target market’s needs. 1 thing that is changing the game is introduction of technology in this industry. How? lets keep that for the next discussion. Have you faced similar challenges while seeking funding for your service start-up? #servicebasedbusiness #startup #funding