6. Operate on a lean, conservative budget. Develop fiscal responsibility. Whether you bring in profits of 1,000 or 1 million you should spend wisely and eliminate as many unnecessary costs as possible. If you have a surplus, reinvest it into the company or a SEP IRA (retirement plan).
7. Identify multiple suppliers and vendors. You may find you prefer working with one supplier over another and that’s great, but always have and utilize a backup list. It’s inevitable that a suppliers’ staff may change (no more special perks), they may experience significant delays or increase your contracted pricing with little notice (it happens). Be prepared, flexible and agile with secondary vendors lined up to replace those that misbehave.
8. Request rate locks on all contracts. As a startup, price volatility can break your budget. The last thing you need to worry about is not having enough funds to pay a vendor due to rate increases. In exchange, offer a longer contractual agreement.
10. Dig into the dirty details early. Always nail down the specifics of a deal in advance and put everything in writing. A verbal agreement isn’t worth the paper it’s written on. Save the hassle and time of renegotiations and outline costs upfront.
What financial lessons did you learn your first year in business? Share them in the comments section below.
Photo Credit: Burberry