When you’re a startup founder nothing is more important than tools that can help extend your longevity and chances of survival in the first year or two.
Running out of cash is a very real problem, and it means an end to your grand ideas. To extend your chances of survival there are tools available that will help manage your cash flow, reduce overheads and minimise your overall running costs.
Utilising freelancers and contractors
Collette McShane, founder and owner of four fitness-focused startups operating under the HIIT Mum umbrella, says that utilising freelancers and contractors is a great way to avoid onerous staff overheads while growing your business.
“It’s great from a startup perspective because you do not have to worry about full time salaries,” McShane says.
McShane has used the services of contractors across the range of startups she runs, from the PT in My Pocket app, to her HIIT Factory fitness centre and HIIT Box subscription service.
“I work every day within the business, and my partner does as well,” McShane says. “We use contractors for our fitness instructor team and then people like creative designers and website developers on a contract basis.”
“It’s a lot easier to manage things this way until the business gets bigger and we can hire permanent staff.”
Real time data and forecasting
As a startup founder, McShane says it’s important to have control over all aspects of how the business is running.
“I’m very hands-on with my business, especially now I’m looking to take it to the next level,” she says.
The ability to look at your expenses in real time helps keep you on track and gives you instant access to data that shows you how your business is travelling, McShane says. For example, a smartphone app from the online power company Powershop has allowed her to predict the business’ electricity usage and costs – in real time, she says.
The app has allowed her to identify how much power was being used and forecast the upcoming month’s cost before paying the bill to avoid blowing out the month’s budget.
“The great thing about real time data apps is that you’ve got everything at your fingertips,” she says. “It’s about always staying ahead of the game and not behind it.”
Access to real time data with a smartphone app has meant improved management of cash flow via buying power in advance, as well as being able to predict future energy consumption so there are no surprises.
Financial forward planning from the palm of your hand
Forward planning your finances is critical to the survival of a startup, says McShane.
Utilising a range of software and apps – as well as a good accountant – can help you stay on top of your cash flow and increase the chances of the startup’s survival.
“Forward planning can ensure that you’re not in a situation where you can’t pay contractors and other expenses,” McShane says.
The Powershop app, for example, has allowed their business to control payments and billing without the anxiety of exit fees or lock in contracts that so many startup owners face.
“I’m actually getting to the stage where there’s so much going on that it’s not always easy to keep track of [cash flow] and there’s been some times where it’s been really tight,” she says.
Agility and flexibility
Control over business operations and access to real time data can help you react quickly when a downturn does occur, McShane says.
“I react to things to things throughout the year that are happening within fitness,” she says. “So rather than always assuming we’re going to be having a little drop in revenue, we might put together a six-month challenge, or something, to really give us a boost when we need it.”
But despite all the tools at your disposal, nothing beats the power of a vision for the business and hard work, McShane says.
“Not losing sight of where you want to be and continuous hard work are incredibly important,” she says.
“I really kicked off with a vision about where I wanted to be and where I wanted to go to. It sounds like a no-brainer, but nothing beats a massive amount of hard work.”
Visit Powershop to find out how to save money on your electricity for your business.
Written by: Jacob Robinson