Startup founders have a seemingly never-ending list of things to do, whether it’s growing sales, hiring new team members, or marketing your latest product. Since you might be responsible for many of these tasks yourself, thinking about your company’s finances might not be at the top of your list. But you can learn from other entrepreneurs’ financial mistakes and avoid making them yourself to save money and focus on your growth right now.
Not Using the Right Fleet Technology
If you have a fleet or are looking to add one, you can implement the right technology to plan your routes, which can reduce expenses like fuel consumption. But before purchasing a solution, it’s a good idea to review GPS tracking costs to make sure you are getting the most for your money.
Not Doing Your Taxes Correctly
It can be tempting to save money and do your taxes yourself instead of hiring an accountant, but this can lead to expensive mistakes and fines. You may owe payroll taxes or need to do quarterly returns. If you do not file your business taxes or withhold the right amount from employees’ paychecks, you could end up owing more in fees than the cost of hiring a tax professional from the start.
While having an ethical business may seem like the gold standard, there are many temptations for entrepreneurs along the way. Potential investors often ask tough questions, and it can be tempting to put your organization in a better light. But being caught in a lie means any opportunities will disappear. Acting with integrity can set the stage for an honest, trusting relationship and avoids one of the most significant startup financial mistakes.
Not Investing the Right Amount of Money in Your Company
If you want to attract the right investors, you will need to invest in your own business. They want to see that you have an interest in your company that goes beyond simply starting it. While there is no correct number or percentage, you should have enough invested that founders will see it is more than just a passing interest. On the other hand, if you put too much in, you might end up carrying personal debt. This has its own set of issues with potential investors. An investor might conclude that the startup owner will need to liquefy assets to cover their debts.
Looking for Investors Too Soon
It is extremely uncommon for startups to get investments based only on their ideas. Before you get someone to put money into your organization, you will need to have met some common milestones to show you are more likely to be successful, and you will likely need to have your business plan solidified. If you do look for investors too early, you will likely not be presenting your best self because you show you do not understand what investors are interested in, and it often takes time to prepare your application materials. Without completing them correctly, your entire application could be rejected without a second glance.
Avoid Hiring Cheap Help
If you can’t hire good employees, you can’t afford to hire cheap ones either. Cutting corners in the talent you work with can result in wasted time and money. They might cause you to waste products, lose customers, and decrease your brand reputation. Your employees can make or break your company, and smaller businesses especially can’t afford to cheap out in this area.
Time is your most valuable asset as a business owner, and wasting it is an expensive startup financial mistake. After all, time is money and many entrepreneurs are inefficient in their time because they don’t work on the right things, or they are not smart in how they work. You might think that by taking on as many roles as possible, you are saving money on outside labor. However, if you are not an expert in these fields or you have too many roles, you will not be as productive as if you hired someone to do it for you by outsourcing tasks. Knowing your priorities and working on things in order can help you avoid wasting time. Simplify your business plan and your to-do list on an ongoing basis to remove potentially expensive distractions going forward to maintain long-term success.