Being a digital startup founder is all about being inspired to create something new, vibrant and exciting. In the course of getting the startup off the ground and running well, it’s easy to end up mixing personal finances with business. This is a mistake. Even though you need to create a financially successful business in its own right and get out of ‘startup mode’ eventually, in the meantime it’s important to run a tight ship on the home-front too. Here’s how you do that.
Get on a Personal Budget
This may not sound glamorous, but it sure helps. When you’re having trouble balancing the checkbook and figuring out where your money is disappearing to, making a plan for every dollar of your salary is a good start.
Using a software tool like YNAB – You Need a Budget – is successful for many people who have trouble keeping everything in check. Believe me, when running a business, it’s hard to keep all the plates spinning at the same time. Sometimes you drop a few, and usually that’s in the personal finance area.
Found a Cashflow Shortfall? Apply for Payroll Advance Loans
If you have a particularly expensive month and all your savings have already been invested into the business, don’t raid the company. Instead, get an advance loan that will help to resolve the shortfall until you get a cheaper month in order to repay the loan.
Getting a payroll advance is a great short-term solution. It can be up to $2,500 in one go and is repaid through a series of easy installments. Using the budgeting to isolate when you’ll run into a cashflow deficit is useful. Apply for a payroll advance loan before you actually need the money. By submitting an application slightly in advance, the payroll advance online comes through right when you need it. Problem solved.
Find Where You Get the Most Value
Move away from the concept that everything inexpensive or free is low quality or not worth doing. This only leads to higher expenses which forces your company to pay a higher salary to you while it’s in growth mode and needs most of the earnings to be reinvested.
Think about what things you enjoy the most in life. Often, it’s not the expensive trinkets or luxurious vacations, but the little things like spending time with friends or loved ones. Cut back in the areas that don’t bring you as much pleasure as you thought and spend up on fun. It’ll be more enjoyable, and you’ll spend less maintaining your lifestyle too.
When managing your personal life reasonably well, including your money, it avoids problems regularly impacting your business too. Even when you keep finances separate, personal money issues will affect your performance within the company if you don’t keep everything straight. It’ll bleed into everything else and you may end up having to increase your salary just to stay personally above water. Ultimately, this could hurt the sustainability of a new digital business due to paying higher wages to yourself than necessary in the early years.