5 Bad Habits That May Be Hurting Your Startup’s Cash Flow

A thousand and one things will be swirling through your mind when you’re putting up a new business from scratch — from conceptualization to hiring to operations to marketing and to sales. This can go on and on. But the bottom line is: building a business is not easy.

Building From the Ground Up

Starting your own company is not child’s play. Keeping it alive and thriving is even more of a challenge. It will eat up your time, energy and money to such an extent that will make you think twice, thrice or more. You may even find yourself asking why you started it in the first place.

Yet, when you are passionate about what you do and you believe in your business concept, you will cross rivers and mountains just to achieve what you set out to achieve. From ground zero, you will do all you can to fly high and succeed.

Challenges Make You Stronger

One of the challenges in starting a business is the availability of cash – or the lack of it. Where to get cash at the outset is top of mind for most entrepreneurs who do not have mounds of money to start with. As you move along, cash management will become even more critical.

It is a reality that you must deal with. You need to be on top of things, especially the amount of cash that is coming and going. The amount you owe, the amount owed to you, and the amount of cash you have that is readily available must be carefully tracked and recorded.

There may be things that you are doing that will impact your cash flow. If left untended, these unsound practices may be the traps that will lead your startup to fold. To help avoid a nasty fall, here are some bad habits to get rid of:

Bad Habit #1: Biting off more than you can chew

It’s not bad to dream big. But perhaps the better way to go is to dream smart.

When starting a business, know first what you are working with so you do not take on too much. Overextending your limits especially when you have low or almost non-existent funding may cause your business to fail even before it takes off.

Available cash is fuel to the fire. It is the lifeblood of your business. Choose an entrepreneurial project that will bring in a positive cash flow. You will bleed money if you do not plan well and explore all possible angles before embarking on a business venture.

Just put enough on your plate. You can always have second helpings.

Bad Habit #2: Not doing your homework

Bad habit no. 1 could have been avoided if you only did your homework.

Dreaming smart means conducting extensive research on the ins and outs of your business idea. Be realistic with goals. Talk to experienced business owners. Look for a mentor. Get a course on entrepreneurship, if need be.

Do whatever it takes to teach yourself especially about how much money you need to effectively begin and sustain a new business.

Conduct crisis management even before it happens. Secure credit even before you start opening your doors. This way, when you need extra funding, you won’t have a hard time hunting for cash to keep your business afloat.

Bad Habit #3: Being too proud to ask for help

As mentioned earlier, feel free to consult people with knowledge of and experience in running a successful business. You stand to benefit from their expertise and industry know-how.

When you are besieged by gazillion things that you need to attend to regarding your startup, do not be too proud or too shy to ask for help. There will be times when you cannot devote the necessary time and attention in handling your cash flow. When this happens, you may be headed for disaster.

Avert this catastrophe by making use of the right cash management solutions. From account management to channel management, there are banking institutions that have dedicated teams that can assist you with your cash flow concerns.

These experts will have in-depth consultations with you, conduct thorough assessments, and present an appropriate plan of action to help your business soar.

Bad Habit # 4: Not maximizing your credit card

Your business credit card can be a useful tool. It would be wise to maximize its use especially when buying inventory and other items.

You can effectively manage your cash flow and have a simpler life with your credit card cash back incentives of as much as 1.5 percent on all your monthly purchases. It is also possible to use it to get cash against your available credit, transfer your outstanding credit from other banks, and use it for a personalized payment plan of up to 24 months.

You also get fun perks such as free movie tickets, premium airport lounges, and convenient access to payment centers. What’s more, you get all these with zero annual fees.

Bad Habit #5: Ignoring technological perks

If you’ve been living under a rock, it’s time to get out now. You need to be tech-savvy when you are running a business. You don’t have to go straight and plunk down heavy investments on enterprise running tools right away.

There are free or low-cost apps that are both efficient and effective in helping manage, record, and track cash flow. Make use of these technological innovations to streamline and simplify your cash management system.

Out With the Old, In With the New

Old (bad) habits die hard, as they say. Ditch them as soon as you can. Better yet, when you’re only planning to start your business, keep these tidbits in mind.

Start with a clean slate. Be well-informed so you know what traps to look out for. Learn from the mistakes of others. When you value the wisdom of those that have come before you and learn from the best practices of successful entrepreneurs, then you, too, will be on your way to joining the ranks of entrepreneurs with a successful business.