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Council Post: 20 ‘First Steps’ For Financial Planning Startup Success



The success of a startup often hinges on meticulous financial planning and management. For many entrepreneurs, this can be a source of stress and an overwhelming part of their journey. However, it’s an essential part of the path to sustainability and growth.

To help, 20 Forbes Finance Council members share the first things every entrepreneur should address when creating their business’s financial plan and why each is such a critical step to take.

1. Build An Accounting Process

Financial management and planning are key to the success of a business. It is a vital pillar that forms the backbone and life of the business, ensuring growth and self-sustainability. The first step that a startup is required to take is to build an accounting process adequately resourced to work across departments for accounting, planning and fundraising, following appropriate governance guidelines. – Neeti Virmani, Loyal VC

2. Create A Detailed Budget And Cash Flow Projection

Financial management and planning provide a roadmap for growth and stability. Initially, it helps in allocating resources, avoiding unnecessary expenses and ensuring funds are allocated where they’re needed most. The first step is to create a detailed budget and cash flow projection. This allows you to understand your financial position and make informed decisions. – Richard Polgar, CFG Merchant Solutions & CapFlow Funding Group

3. Have A Pulse On Growth And Deliverables Gaps

Financial management is at the core of any successful business. Without insights regarding your business’ finances, it is impossible to see the potential for development opportunities. Startups can often take off and without having a pulse on your finances there can be gaps in growth and deliverables. It can hinder growth opportunities if you are unaware of the options to leverage growth. – Kyla Fiddick, SASU Consulting Inc.


4. Be Guided By A Financial Model

Entrepreneurship is the art of balancing two conflicting forces—passion and operational discipline. Passion is the fuel for business owners, but it cannot blur the process of making the “right” decision for the company. This process needs to be guided by a financial model and an understanding of the financial levers, goals and risks for each stage of your business. – Eyal Lifshitz, Bluevine

Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?

5. Create A Detailed Business Plan

Financial management and planning are crucial as we enable efficient resource allocation, financial stability, decision-making, investor confidence, business valuation and compliance. The first step is to create a detailed business plan, including budgeting, financial forecasting, record-keeping and monitoring, setting the foundation for sound financial management throughout the startup’s journey. – Mitt Mehta, SENTA Partners

6. Know How Long Your Money Will Last

The most common reason a startup fails is due to bankruptcy. The first step to avoiding this is knowing how long the money you have will last. If you’re going to need to raise money again, then it’s important to know what an investor will want to see before investing and work with a laser focus to action against those outcomes. – Ram Palaniappan, EarnIn

7. Set Up Separate Business Banking Accounts

Small business owners are good at their business—cooking, doctoring animals and designing clothes. Financial management may or may not be a strength, yet is what makes for long-term sustainability and growth. The first steps are to set up a separate business banking account and develop a set of accounts. Local women’s business centers and small business development centers offer free or low-cost services. – Carolina Martinez, CAMEO

8. Have Regular Reviews And Plan Adjustments

Planning, along with regular reviews against the plan, set the stage for sustainable growth. Make a plan, but have regular reviews against that and don’t be afraid to adjust and iterate. Especially in your early days, use a budget as a guide but review regularly and adjust for things that aren’t providing value and for those that are accelerating growth. – Michelle DeBella, JumpCloud

9. Visualize Where You Want To Be

Getting in a car in California and just driving and hoping to reach New York is not very efficient. You need to plan the trip. Planning is key! The first step in the right direction is sitting down and visualizing where you want to be. Then start figuring out the steps that should take place to get you there. Constantly revisit your plan and action steps. – Bob Chitrathorn, Wealth Planning By Bob Chitrathorn of Simplified Wealth Management


10. Create A Comprehensive Financial Plan

Financial management and planning help to wisely allocate the limited resources that startups have, help maintain a positive cash flow and can make a startup more attractive to investors. The first step in the right direction is to create a comprehensive financial plan entailing goals, budgeting, cash flow projection, frequency of performance review or even seeking professional advice. – Gina Yuan, Aurum Capital Group

11. Invest Your Own Money

Growing an organization organically can be very beneficial. Instead of using other people’s money, investing your own will allow you to make wise decisions based on your knowledge of your company’s potential. When it’s your own money at stake, you’ll understand the importance of careful planning and management. Effective financial planning and management are both critical to your success. – Gomathy Periathiruvadi, Alita Systems

12. Enhance Your IP’s Valuation

Financial management and planning are the lifeblood of a startup. The first step is to create a comprehensive financial plan that includes budgeting, forecasting and contingency planning. This not only ensures sustainability but also enhances your IP’s valuation, making it an attractive asset for potential investors. – Joseph K. Hopkins, Fallingst Technologies LLC

13. Understand Cash Flow, Burn Rate And Runway

Financial management and planning help startups to have a rounded understanding of how to utilize financial resources in the right direction optimally for the highest returns. Understanding the cash flow, burn rate and runway is critical at the initial stage to keep the business in operation until it becomes profitable. – Oluwatoyin Aralepo, Mastercard Foundation

14. Ensure Your Team Understands The Plan

Financial management and planning are your bones, they are your base foundation. When the base is shaky, the whole system can fail. The first step is grounding that financial management and plan while making sure everyone on the team has a mutual understanding of the core values and mission. – Guadalupe Rodriguez, Talipot Holding

15. Work To Continuously Improve

Continuously improving is, in my opinion, the best way to increase your odds of success in entrepreneurship. It is a long game, and the compounding improvement that can take place over a long time horizon is astounding. – Nick King, Vint

16. Check Your Numbers

Early-stage startups, especially those that bootstrap, can starve to death for lack of cash flow. Understanding and managing your cash budget (by month or even by week) is more important in the early days than income or loss. The first step is knowledge. Know your numbers. You should check your accounting system daily. As you grow, your operations or finance person can monitor but until then, it’s you. – Don Cardinal, Financial Data Exchange


17. Establish An Adaptable Budget

Financial management is pivotal for a startup’s longevity and growth, ensuring sustainability and investor trust. Proper planning prevents cash flow issues, guiding informed decisions. The first step? Establish a robust, adaptable budget that accounts for both short-term operations and long-term strategic goals, ensuring resources align with the vision. – Greg Cucino, Roundtable Strategy Advisors

18. Be Financially Disciplined

Financial discipline and planning are the backbones of startup success. The very first step is to work with your accountant and attorney to develop a thorough business plan with realistic financial projections. With budgeting and projections, you can make smart decisions about managing cash, tracking spending and planning for strategic growth milestones that you should regularly revisit. – Blake Harris, Blake Harris Law

19. De-Risk Your Financial Model

Entrepreneurs must prioritize de-risking their financial model before seeking capital. Self-sustainability, proven business models and diverse KPIs are crucial. Embrace time as an ally, focus on building a robust foundation and control your destiny to pave the path to profitability. The race to the bottom on price is futile; the key lies in patient and resilient entrepreneurship. – Sean Cantwell, Volition Capital

20. Assess Capital Needs

Accurately assessing capital needs is the key to startup success. Balance is crucial—too much capital can lead to unnecessary debt, while too little can limit growth. Connecting with business mentors or a network of peers can help entrepreneurs learn from others’ experiences and receive outside expertise on their financing needs. – Allison Kelly, ICA Fund

Source: Forbes


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