Turning the dream of your own business into a reality is an opportunity too good for most people to pass up – and it can be incredibly fulfilling if you make it work.

It takes careful planning to deal with the reality of operating a company, though, and statistics show that 20 per cent of businesses fail in their first year. Making sure that yours doesn’t meet that same fate will require wise management of its finances.

Create a financial plan

The best way to ensure that nothing gets out of hand is to establish a clear plan from day one. Knowing your expectations enables you to work within your means, so take the time to detail what is possible. Your business plan should cover all the costs involved in delivering your services and include reasonable forecasts of what you anticipate being able to sell over short, medium and long-term periods.

Track your spending

Once your plan is set and you’ve begun operations, keep a close eye on your spending. Even if it doesn’t exactly match what you set out in your initial plan, that’s fine – but you might want to adjust your forecasts to align with how things are turning out. Having a clear record of your outlay on product orders from suppliers like RS Americas, staff or client entertaining, and daily running costs can help you identify areas where you might be overspending.

Explore funding options

If you’re feeling the pinch and don’t see ways to cut costs that still enable you to deliver your products or services, it might be time to look into ways to bring in new funding. With a realistic business plan behind you that can show the roadmap to success, you can find opportunities to boost your cash flow.

ALSO READ  The top 10 reasons your company requires leadership education

Traditional and online lenders alike are common options for an injection of cash to build a platform for continued success, while increasing American familiarity with crowdfunding might offer you an alternative route to completing a particular project.

Make use of technology

One way to tighten up your outgoings is to reduce the risk of human error that could impact your business. Automation software is available for a variety of business purposes, including payroll, processing customer payments, data analysis and forecasting, and a variety of other accounting tasks.

Cutting out time spent on laborious, repetitive tasks empowers your staff to focus on more challenging and important work that makes the most out of their working hours. It gives you more confidence that your finances aren’t springing any leaks due to inefficiency.