In this video, Mohamed Chaudry gives 5 top tips for startups when it comes to financial management. If you struggle to stay on track financially for your startup, this is the video for you.

Hi, my name is Mohamed Chaudry. I’m the Chief Financial Officer at SEAJET Systems.

Today’s topic is five financial management tips for startups. Staying on track financially can be one of the most challenging aspects of creating and managing a startup. However, there are a few key things that you can do to stay on top of your finances.

Firstly, monitor cash flows. Knowing where your money is coming in and where it’s going out, is the most essential financial element you need to understand when creating a financial roadmap for your business. Getting a good understanding of these variables should give you a good start analyzing the health of your cash flow, and give you the ability to create cash flow forecasts.

Secondly, reduce unnecessary spending. Consider your spending and evaluate what is essential and what is not. Is there any unnecessary spending, things such as business travel, perks, business expenses, or overheads, which are not needed until further down the line. It’s all about priorities in costs and maintaining healthy cash flows.

Thirdly, prepare an emergency fund. Regularly depositing cash into an emergency fund will serve you well in riding out the first few years of your startup’s financial growth. This pot should be used for costs such as PAYE, VAT, corporation tax, as well as having cash for any unforeseen financial or economical turbulences.

Next, I would say using accounting software. Many businesses, in the early days try to make do with using Excel to calculate their finances. Accounting software will not only save you time, but is  able to provide you with up-to-date information, much faster than a static excel document. Many accounting software apps also sync to other business applications. For example, you can get direct feed from your bank account directly into the software, which means you don’t need to manually upload your bank statements. This makes running your business a lot more easier. There is a lot of plenty reasonably priced software out there which can help you organize your cash, generate accurate financial reporting, and help you gauge profitability and monitor your expenses.

Lastly, I would say, raising sufficient funding. One of the most common reason a startup fails within its first few years is simple lack of capital. Having enough money in the bank when starting will mean obstacles are more easily conquered. A big mistake I see startups make when raising funding is actually not asking for enough. You need to ensure that you do not only gauge what you need, but you add a buffer for maybe under estimating some costs, it is projections at the end of the day. Also to take into account things such as, it might take your business time to gain traction. Startups either don’t fully understand and project what they need or get scared of asking for the actual need and instead ask for what they think they are able to get.

Understanding these tips should instil momentum in your business and see it continually grow and succeed. If you’ve got any questions, look me up on LinkedIn, Mohamed Chaudry, and if you’ve got any questions, I’ll be delighted to assist you.

Now CFO at SEAJET Systems, Mohamed is a dynamic and visionary CFO and entrepreneurial growth accelerator with over 20 years of proven track record in corporate finance, focusing on high growth, turnarounds, fundraising, financial strategy, and implementing solid governance.