Understanding minute details of cash inflow and cash outflow minus delegation of this activity means that one is good in cash flow management. However, it is not always necessary to commence a start-up business with having money in the pocket. If you are pretty sure that you have the required product and service that public demands then lack of cash flow should not be a show stopper at any cost.
Following are the ways suggested to start business without having a running cash flow:
Provide services instead of having a product based business – To start a product based business, a lot of funds is required during initial days. In this situation, it is advisable to start something based on services which do not require capital, etc. Service based start-up helps in building credibility, market knowledge, helps build clients, networking that otherwise takes a lot of time to build.
Do it yourself – It is essential to believe in yourself and get involved in everything i.e. right from conceptualizing of the business, doing all the necessary documentation on your own, going door to door to gather customer needs and look for business and thus get a sense of how market operates. Since cash flow is meager hence in the initial two years, one has to sweat it out on your own. It takes some time to understand the strength of the business and other smaller nuances. Once people start knowing your strengths then automatically they would start buying your services and will get used to it and then you can start taking your calls.
Creativity is essence – Get creative. There is an old age saying that in order to be successful one should stick to a goal and remain focused. Though during initial days when there is desperation, and continuous cash flow is a difficulty then one can try hands in more than one services. For that, one should be creative and adjust according to market needs and demands.
Using resources in exciting ways – In case one has an existing set-up and is facing cash fund shortage, then it would be a great idea to see how various employees can contribute with their creative minds and help develop new avenues in existing business. Many employees can contribute in their own ways and result may be a new software, a new website, etc. This may help you to get a much-needed contract with another company. At times, such deals are so successful that it takes away your company from doomed cash flow situation to flourishing profit-making firm. Investors would get interested like this and would be more than willing to invest in your company.
Value for being “Different” – There is no easy route to generate profit. One such way to make profit is to be “different” from crowd of companies in market and this is possible only when you are willing to put in hard work, have a good personal credit store, try having intellectual property rights which are viewed valuable in market, have potential to generate revenue.
Eye on Cash Flow Chart – Small companies should avoid coming into the situation of being cash strapped. They should not be too dependent on cash flow and instead should concentrate on keeping costs low at bay and instead find ways of funding when they do not get their cash back on time. In order to avoid such a cash strapped situation, one should keep an eye on the cash flow chart. It can be done by making a list of expenses i.e. monthly, one-time, start-up expenses, etc. This is important as one should be aware of expenses and costs and where is it involved in order to make the company profitable in the long run.
Business Partner – Having a partner in business who is willing to invest which you cannot during initials years, can be a good option for start-ups. The partner would be interested only in putting in more cash, and you would take care of the rest of the services. As your company reaps the profits, the money invested by the partner can be either returned or partially returned/ or partially invested. It may differ from company to company and also on the relation one share with their respective business partner.
Free website – All companies need a website for publishing its product and services. However for a new start-up it will require loads of funds. One can create a free website or use tools that other companies offer to you in order to create your website.
Barter for your services – In order to gather daily cash flow, you can barter for offering certain services insteadof your needs of the start-up business.
Networking – You can build an effective networking channel based on recommendations given by your friends, family, relatives, etc. Through their help, you may not need to spend even a penny and instead you can offer great services to good client.
Documentation – It is essential to document each and every business projection, expenditure, costs spent on a daily basis in order to meet your business needs. It will help you predicting any problem that can otherwise go unnoticed if not paid attention during day to day affairs.
Be prepared for delays – The best of customers can delay their payments when you require the most. Bankers and Investors can withhold funds that they had otherwise promised to pay on a certain date. It is important that when one prepares cash flow charts and keep a credit lineand not have any space for such unwanted surprises.
Apart from above options, there are certain other options namely finding an accelerator which is willing to support your business plan and invest in it rapidly for initial days. They expect quick results and this one point can be a deterrent to going for this option. Another option is Crowdfunding, which is quite similar to Kickstarter option of giving a push to an idea by the help of investment.
Author Info Manish Khanna
Manish Khanna is a serial entrepreneur, philanthropist and genuine Australian success story. In a decade he has built an online empire unlike any other. He is currently the Managing Director of more than 10 individual companies. These include the flagship Business2Sell which operates internationally in 6 countries. The others include CommercialProperty2Sell, Million Dollar Mansions, Netvision, BCIC Pty Ltd and Better Franchise Group, to name a few.
With more than 21 years’ experience developing web applications plus very successfully creating, managing and growing start-ups, he is forging ahead to turn more of his innovative ideas into future success stories.