{"id":42932,"date":"2023-10-20T15:24:51","date_gmt":"2023-10-20T15:24:51","guid":{"rendered":"http:\/\/startupsmart.test\/2023\/10\/20\/what-is-best-business-loan-or-personal-loan-for-your-startup-startupsmart\/"},"modified":"2023-10-20T15:24:51","modified_gmt":"2023-10-20T15:24:51","slug":"what-is-best-business-loan-or-personal-loan-for-your-startup-startupsmart","status":"publish","type":"post","link":"https:\/\/www.startupsmart.com.au\/uncategorized\/what-is-best-business-loan-or-personal-loan-for-your-startup-startupsmart\/","title":{"rendered":"What is best: Business loan or personal loan for your startup? – StartupSmart"},"content":{"rendered":"
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If startups focus too much on the financials, they may miss out on the right business model and company culture<\/i><\/p>\n

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There is no question that in order to be successful, startups need to have a good financial strategy in place. But a financial strategy is just one piece of the overall business puzzle, and nailing the overall business model is vital.<\/p>\n

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Deloitte Private director Duncan Stevenson says a startup\u2019s focus should always remain on the development and refinement of its business model.<\/p>\n

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\u201cThe commercial outcomes of the business model need to support long-term sustainability and through extension, this will also drive your financial strategy,\u201d says Stevenson. \u201cSetting your financial strategy is based on understanding the financial needs of your business model to provide the cash you require, to achieve your goals in the short, medium and long term. Once this is understood, you can consider the likely sources of cash.\u201d<\/p>\n

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He advises that you need to understand where your growth will come from and have some comfort that the growth is supported by market dynamics.<\/p>\n

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\u201cFor example, a business planning for unrealistic growth can get out of balance if they over-invest to support sales that do not eventuate, resulting in non-commercial outcomes,\u201d says Stevenson.<\/p>\n

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The Practice senior manager of business advisory Graeme Anstey encourages startups to take the \u2018Balanced Scorecard\u2019 approach \u2013 that is, focusing on the four pillars of every business.<\/p>\n

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\u201cI know this sounds controversial coming from an accountant, but business owners should first focus on the other three pillars of business: your people, your processes and your customers. These three pillars drive the final pillar, your financials,\u201d Anstey says.<\/p>\n

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\u201cThe reason you should develop your financial strategy last is because the success of your financial strategy depends on your ability to fully understand your business, your industry, your competitors and your target market. Without a clear understanding of these, your financial strategy will be a guesstimate.\u201d<\/p>\n

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Pitcher Partners executive director of business advisory David Knowles says prior performance is always a good starting point for a business to build a financial strategy.<\/p>\n

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\u201cIf no prior data is available, then begin with short term budgets with estimated revenue and expenses that are monitored. Using other benchmarking information can also assist,\u201d Knowles says.<\/p>\n

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Anstey says that once you develop your financial strategy, you then need to monitor your performance regularly to ensure you\u2019re on track. He recommends startups set key performance indicators (KPIs) to quickly see how they\u2019re tracking against critical measures.<\/p>\n

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\u201cThe best way to do this is tapping into the benefits of cloud-based accounting software to build a business dashboard so you can see at a glance how you\u2019re tracking to your KPIs, no matter where you are in the world,\u201d Anstey says.<\/p>\n

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When it comes to communicating your goals to your team, Stevenson says a balance of both culture and strategy is the key to success.<\/p>\n

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\u201cDoes culture beat strategy, is an often debated question, but the answer is most likely in the balance. Your team drives your culture, and your culture needs to support success,\u201d Stevenson says.<\/p>\n

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It\u2019s important to remember that a financial strategy is only one piece of the puzzle. Startups need to have a firm understanding of their business model, including their team, their customers and their processes. Through this understanding, coupled with realistic goals and planning, startups can better avoid financial hiccups in both the short and long term.<\/p>\n

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Written by: Nicola Trotman<\/p>\n

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This article is sponsored by Australia and New Zealand Banking Group Limited ABN 11 005 357 522 (ANZ). The views and recommendations that are made in this document are those of the author and not ANZ. To the extent permitted by law, ANZ disclaims liability or responsibility to any person for any direct or indirect loss or damage that may result from any act or omission by any person in relation to this material.<\/span><\/em><\/p>\n

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Success starts here<\/em><\/strong><\/p>\n

If you\u2019re thinking of starting a small business, or have recently launched one, you want to do everything you can to ensure its success. Visit the $2 Billion Lending Pledge to find your local ANZ Small Business Specialist and get an indication of how much you could borrow.<\/em><\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

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