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Maximizing Cash Flow for Your Startup For startups, managing cash flow is essential to staying resilient and funding growth. Here are some smart strategies to strengthen your cash position: 1. Optimize Your Receivables Streamline invoicing to ensure timely payments. Consider offering early payment discounts or implementing automated reminders to improve collection speed. 2. Control Spending with a Cash Flow Forecast A cash flow forecast helps you anticipate and plan for high-cost periods. Review your forecast regularly and adjust for unexpected expenses to keep your budget in check. 3. Negotiate Vendor Terms Negotiate extended payment terms with suppliers to ease cash flow constraints, allowing you to retain funds longer. 4. Build a Cash Reserve Setting aside funds for unexpected expenses helps protect your startup from cash flow interruptions and offers more flexibility when growth opportunities arise. 5. Review Subscription Costs and Recurring Expenses Regularly audit all subscriptions and overhead costs to eliminate unnecessary expenses and reallocate funds to high-impact areas. 6. Utilize Financing Wisely Strategic use of financing options, like lines of credit, can help you cover short-term expenses without disrupting your cash flow. Efficient cash management allows you to make confident, strategic decisions that support sustainable growth. #CashFlow #StartupFinance #BusinessGrowth

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

Smart comes second, sheer effort comes first. There are two ways to make money, the smart way and the non-smart way. The smart way isn’t very accessible, it requires a unique idea of brilliance, with the right backing at the right time or by putting existing funds into investments to grow wealth. It’s mostly VC backed startups where you spend someone else’s money to launch something groundbreaking. They usually fail, but if they do succeed, it’s big wins. The government only backs this type of innovation with grants. It’s the 1% route. Next is the non-smart way, where you launch a service or commerce business. It’s not groundbreaking, but has purpose driven by your passion. You live your business and it costs you nearly everything. You make smarter decisions as you grow, but winning is down to sheer effort and not giving up. The government doesn’t back this business, although SMEs maintain our economy. You finish first because you’ve built a sustainable business through grit and you can exit knowing the acquisition price is solid. I grew my business the non-smart way and I prefer working with these types of clients. Real people investing their hard earned money into their future. I’ve had meetings with many VC backed leaders and while some of them are brilliant, I often thought who’s daft enough to give this prat 500k. I’m no business tycoon, but none of the funded ventures we didn’t think were a good fit are actually still around. Most of the SMEs are. Grit & Passion can’t be brought It wins every time

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

Indicators Investors Use to Evaluate Startups 📈💡 When it comes to securing funding, investors rely on key metrics to assess a startup’s potential. Here are some critical indicators they track: 1. Monthly Recurring Revenue (MRR) 💵 Consistent, growing MRR is a top signal of product-market fit and financial health. The higher your MRR, the more confident investors are in your growth potential. 2. Customer Acquisition Cost (CAC) vs. Lifetime Value (LTV) ⚖️ A low CAC and high LTV ratio signal efficient growth. Investors love startups that can acquire and retain customers cost-effectively while maximizing their lifetime value. 3. Gross Margin 📊 Strong gross margins reflect the profitability of your product/service. Investors pay close attention to margins to understand how efficiently you can scale and generate profit. 4. Burn Rate & Runway ⏳ How much cash is your startup burning each month? Burn rate and your cash runway tell investors how long you can operate before needing more funding. 5. Churn Rate 🔄 High customer retention (low churn) is a great sign that your product is sticky. Investors want to see that you can retain customers and avoid high turnover. 6. Net Revenue Retention (NRR) 📈 Are your existing customers spending more over time? A strong NRR shows that your business is growing not just by acquiring new customers but also by expanding existing accounts. 7. EBITDA/Operating Profit Margin 📉 Investors use EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) to gauge your startup’s core profitability. It highlights how well you can generate income from operations. 8. Payback Period 💰 How long does it take to recover the cost of acquiring a customer? A short payback period tells investors your business can reinvest in growth faster. Investors look for sustainable growth, healthy unit economics, and clear pathways to profitability. Master these metrics, and you’ll have a much stronger pitch for securing funding! 💡🚀 #Startups #InvestorInsights #MetricsThatMatter #VentureCapital #GrowthMetrics #Finance

📈 As a startup founder, understanding financial ratios is crucial for steering your business toward success. Here's why: 💰 Liquidity Ratios: Ensure you have enough liquid assets to cover short-term obligations. For instance, if you have $2 in cash and marketable securities for every $1 in short-term debt, your liquidity ratio is 2.0. 📊 Profitability Ratios: Gauge how effectively your startup generates profits relative to revenue and resources. If your profit margin is 40%, it means you retain $0.40 from each $1 of revenue after accounting for production costs. ⚖️ Financial Leverage Ratios: Manage debt and equity financing to mitigate risk and foster growth. A lower ratio indicates a more conservative approach to financing, while a higher ratio may imply higher risk. ⏱️ Efficiency Ratios: Optimize asset utilization and streamline operations for improved performance.   If your inventory turnover rate is 5, it means you sell and replace your inventory five times within a year. 🚀 Growth Ratios: Track expansion and revenue growth to sustain momentum. A growth rate of 25% indicates a y-o-y increase in revenue. 💼 Valuation Ratios: Assess your startup's perceived value and attractiveness to investors. If your price-to-earnings ratio is 20, investors are willing to pay $20 for every $1 of earnings per share. 🔍 Regularly monitoring these ratios empowers startups to make informed decisions and drive long-term success. #StartupFinance #FinancialInsights #entrepreneurship

Hi, I'm Milly and I am a little bit obsessed with Operational Efficiency. Like ‘macroeconomic’, or ‘disruptive’, or ‘vesting’, or my current favourite one that seems to have popped up out of nowhere ‘beachhead’, it’s one of those terms that takes such pride of place in the startup lexicon that newcomers are afraid to ask what it means for fear of looking like they don’t belong. Everyone starts at the start in entrepreneurship and there is no such thing as a stupid question, so, let's ask: ➡️ So what does ‘operational efficiency’ actually mean? Per my besties (💕Investopedia💕): “Operational efficiency is primarily a metric that measures the efficiency of profit earned as a function of operating costs. The greater the operational efficiency, the more profitable a firm or investment is. This is because the entity is able to generate greater income or returns for the same or lower cost than an alternative.” In simple terms, you’re operating efficiently when your costs are going down and/or your revenues are going up, and you’re relatively more efficient than a competitor if the positive gap between spending and income is higher in your company than theirs. In a post-growth-at-all-costs world, operational efficiency is a particularly interesting metric. Spending £100m to generate £50m in revenue used to just be the done thing in ‘high-growth’ companies (I’m looking at you, SaaS), now investors are more inclined to think that spending £50m to generate £100m is winning. ➡️ Why is operational efficiency important? Simply-put, if you’re spending more than you’re bringing in, then the continued existence of your business is going to have to depend on outside capital. It’s not necessarily a bad thing to not initially be profitable - gotta spend money to make money, babes - but, these days, it’s harder and harder to raise equity investment, and even if you do find it relatively easy to access cash (i.e. you’ve won the demographic lottery and you have ‘AI’ on the ‘what we do’ slide of your investment deck), once you’re in the cycle of raise-and-deploy, part of your business model is always going to be about promoting shareholder or creditor interests - which can often be in conflict with the interests of your two other key stakeholders - your customers and your employees. In short, a business that operates efficiently from the off can have much greater post-exit upsides for its founders and, in many ways, can have a smoother ride on the path towards liquidity. Join me in an obsession with early-stage operational efficiency by reading the article I wrote about three key metrics to consider when planning for operational efficiency in your business. https://buff.ly/4c6RuYH ---------- #startups #strategy #operations Hi, I'm Milly and I help founders win. I’m an expert company builder and I want to help you beat the odds and build a business that’s destined for success, without breaking the bank.

Day 2 of daily dose of Strategy, Finance and Funding hacks for startup founders. Cash is king 👑 If there’s any mantra we should be repeating as startup founders, this is it.  At all times, cash should be front and centre of our mind. 🔑 Key point: Cash and Profit both are different. Cash is literally the liquid currency you have, e.g. Your bank balance. Profit is revenue minus all expenses over a certain period. 🍁 Here’s the catch: Profitable businesses can still run out of cash, while loss-making businesses can continue to operate as long as they have cash. Cash in the bank is better than numbers on an invoice. Improve the speed at which you bring money in and delay how fast payments go out. There are many ways you can do this. For eg: Building good supplier relationships will help you negotiate longer payment terms—this can improve over time . At the same time, negotiate short payment terms with your customers to get cash in the bank as soon as possible. Follow for more 😊 #finattic - One stop solution for all the financial services to scale your startup.

Exploring the basics of securing funding for a startup is crucial for entrepreneurial success. Understanding these key steps can pave the way for your business's growth: 1. Craft a Compelling Business Plan: Your blueprint should articulate your vision, market analysis, financial projections, and growth strategy. A well-defined plan is fundamental for attracting potential investors. 2. Identify the Right Funding Source: Consider options such as angel investors, venture capitalists, crowdfunding, loans, or government grants. Tailoring your approach to the specific needs of your business can enhance your chances of securing the right financing. 3. Build Strong Relationships: Networking is essential in the world of entrepreneurship. Cultivating connections with potential investors or financial institutions can open doors to funding opportunities. 4. Showcase Proof of Concept: Demonstrating a viable product or service, market demand, and potential for growth can instill confidence in investors. Tangible evidence of a promising business idea is key to securing financing. 5. Manage Financials Wisely: Investors look for entrepreneurs who can demonstrate sound financial management. A clear understanding of your startup's financial health and a strategic approach to resource allocation are vital. 6. Be Persistent and Resilient: Securing funding may involve facing rejection and setbacks. Perseverance and adaptability in refining your pitch and strategy are essential qualities for navigating the funding landscape. Let's engage! Share your thoughts or experiences with securing financing for a startup in the comments below. #StartupFunding #Entrepreneurship #BusinessFinance

5 Ways To Cut Cost and Save Money Even If Your Startup Has Cash Flow Problems. What to Do When Your Business Is Broke Running a startup can be tough. Cash flow problems are a common hurdle. But don’t panic. Explore these 5 strategies to see ways your business can survive and thrive. 💚 Slash Your Spending Review every expense, from office supplies to employee salaries. Cut back on non-essentials and explore cheaper alternatives. 💚 Boost Your Income Don't just cut costs 'n create new revenue streams. Offer additional services, upsell existing customers, or explore new markets. 💚 Make Your Money Work Harder Optimize your operations. Find faster 'n cheaper ways to do things. Use technology to automate tasks Cut out time-wasting activities Focus on high-impact projects 💚 Tap Into Alternative Funding Don’t put all your eggs in one basket. Explore options like government grants, crowdfunding, or revenue-based financing. Build relationships with potential investors. 💚 Prioritize Customer Satisfaction Keeping existing customers happy is cheaper than finding new ones. Focus on delivering exceptional service Build loyalty programs. Ask for feedback A happy customer is your best salesperson Remember, it's about surviving 'n thriving. Your business can use this lean period to innovate, build stronger relationships, and emerge stronger than ever. PS: Does the Nigerian economy pose unique challenges for businesses? Repost ♻️ to help a business Ready to dominate your B2B market? Start with your sales copy. DM Queen-Ann for a FREE copy audit.