STAGE 1: The Startup Phase of Entrepreneurship
As a startup, you can’t wait to jump in. You want to hit the ground running and start generating revenue. However, it is important that you set your business financials up right from the beginning. Doing so will ensure greater success for your business in the long run.
Your Business Financials
Getting your business financials in order starts with a checking account and credit cards. Then, the rest of the equation is knowing your numbers and building trusted relationships with professionals who can help your business grow. Each of these puzzle pieces are equally important for their own reasons. Let’s dive into each one in-depth.
Business Checking Accounts And Credit Cards
Often, entrepreneurs like yourself co-mingle personal and business expenses in one bank account. This can become messy quite quickly. You will need separate accounts so you can better track your financials and know your numbers. After all, you don’t want to miss any expenses that you may have put on personal cards. Business expenses can help reduce your tax burden at the end of the year. They are also critical to helping you understand the true cost of business.
Furthermore, setting up business accounts for your business not only helps you organize your financials but also lets you start to establish business credit. This will be beneficial for you in later stages of your entrepreneurial journey when you require financing to grow your business.
Find A Trusted Banker
Establishing a relationship with your banker is important to do before you need financing assistance. Helping your banker to learn more about your business and what you predict your journey to look like can help you and your banker find solutions to your business problems both now and in the future.
You may feel intimidated by financials or banking in general and may be hesitant to ask questions. The truth is most new business owners don’t know much about the financial side of business until they are taught. Just like it’s important to have a good CPA and lawyer on your side, it’s important to invest in a good relationship with your banker. After all, bankers can answer your questions and help you find other partners that are critical to your business like realtors, lawyers, CPAs, and financial advisors. A good banker can also help you create a plan and discipline to streamline your financials and help you set a financial foundation as you grow.
Knowing your numbers is important to understand what the trajectory of your business looks like in a current moment. Your income statement should show you where there are trends and patterns within your business financials. On the other hand, your balance sheet should show you whether your business has a good credit history based on a debt to asset ratio. If you notice any abnormal trends within your financial documents, you will want to seek out your trusted advisors (Village) for assistance. Understanding your financials now will provide you with much needed practice for the future as your business grows.
Find Your Village
Having a Village behind you can increase success for your startup. When you run into questions or experience difficult times in your business, your Village can help you find the resources you need to reach business success.
• A community banker can help you set up business accounts and be your financing partner.
Next Steps Check-in
Keep these concepts in mind to better prepare your business for financial success:
• Open a business checking account and credit card. Be sure you run all of your expenses through this.
If we can help you get to the next phase of your entrepreneurship journey, please reach out to a banker. We would love to be a part of your Village, connect with them today!