Financial planning is crucial to a startup entrepreneur – whether it is business-related or personal. If you are burdened with personal financial issues, it will be difficult for you to grow or develop your startup. You will find it difficult to invest time and resources into your new business and it will ultimately suffer. Hence, personal finance experts from GoAssignmentHelp are sharing a few practical tips that can help startup entrepreneurs navigate through their struggle period more easily:
1. Don’t quit your job until your business is self-sustainable.
Starting a new business is hard work. Many entrepreneurs make the mistake of quitting their jobs to dedicate more time to their business. But in most cases, it proves to be a big mistake. After the initial investment, you still need capital to keep the business running, pay the rent, and buy food. Hence, it is wiser to stay in a job and work on your business until it starts generating enough profits to sustain itself and you.
2. Always aim for a high credit score.
Banks, lenders, and angel investors look at your credit score to assess your creditworthiness or how likely you are to repay a debt. Some of the factors that affect your credit score are:
· The amount you owe,
· Your payment history,
· New credits you have,
· Types of credit in your account, and
· Length of your credit history.
A credit score above 740 is ‘very good’ while one below 580 means that you are in trouble. A bad credit score means that you may not get a personal or a business loan when you need it or may get one at exceptionally high-interest rates.
3. Create a second (and third) source of income.
Liam is a Chartered Accountant and firmly believes that one must have additional income streams to storm over a rough patch. He shares, “I have started my finance consultancy firm and also hold a stable job. Still, I work as an online assignment helper for finance students whenever I have free time. I also invest in stocks, real estate, and other businesses from time-to-time. I do not believe in putting all my eggs in one basket.”
4. Save for retirement and buy medical insurance.
These days, you can compare health insurance policies online and choose one with the best premium rates and best offers. If you are an entrepreneur and own a business, you should also consider an individual 401 (k) retirement plan. In case of a personal or business emergency, you may withdraw your retirement funds.
5. Have an emergency fund.
Though it is considered optimum to have a contingency fund that can cover your expenses for 3 to 6 months, a startup entrepreneur needs to plan for a longer drought time. You should put all you can spare into this account.
6. Earn more, spend less.
Developing healthy spending habits is essential for a startup owner. So, learn to control your personal expenses and stay on a budget. You should also make all your payments on time to avoid fines and a bad credit score. You may consider automating your bill payments, paying your credit card bills in full, and consolidating all your loans to make it easier to pay them off.
7. Consult the experts to create a budget.
If you are not a finance expert, seek out professional assistance from a financial advisor. As a business owner, it is important to learn who you need to hire and when to guide your venture on the path of success.