11 RECOMMENDATIONS FOR ENTREPRENEURSHIP TO FINANCIAL EASILY
Although we avoid polluting our mother tongue by using foreign words in our daily life, there are some terms that the translation does not go with what the original tells.
Here is such a troubling word "runway".
Actually it can mean more than one thing; The meaning used in the enterprise world is the runway, the way the plane must go on the runway until it takes off.
Initiatives, just like airplanes, need to accelerate on the runway until they create an economy of a certain volume, reach a certain scale, in short, rise from the ground. The existence of phenomena such as product development, marketing and fixed expenses during this period means that the enterprise will continue to burn money until this point. In order to survive in this process, the enterprise needs to finance itself in the most optimum way in order to survive.
The amount of time that appears in the portion of the total money in hand to the monthly money burned shows how long the venture has left until it receives a new investment and, in the popular phrase of the enterprise world, how much it is a “runway”.
In summary, if a company that burns 1 TL per month has 5 TL in its safe, this company has a 5-month runway in front of it.
In this article, we will talk about how the enterprises can extend this period and how they can go further with the current capital.
1) KEEP TRACK OF YOUR EXPENSES REGULARLY.
Expense tracking is one of the most important things for a newly established company. You should develop a system in which you can keep track of all your expenditures starting from the establishment stage of the company (possibly even before). For this, you can either use accounting software or you can do this with an excel file in the simplest way. The important thing is to look back at the end of the day and see the expenditures, and to determine the figures that do not catch your eye in the flow but need to be reduced. Measuring is the basis for improvement.
Do not forget to separate your business expenses and individual expenses while tracking your expenses. After making this distinction, define categories for each type of expenditure.
• Food and entertainment
• Out-of-town business trips
• Vehicle and fuel
• Office expenses
• Credit cards
When you categorize your spending, the higher ones will start to catch your eye and you will set out to find solutions to lower them.
You can create your company's savings report to find out which of your expense items are higher than normal and how much you can save from these numbers.
2) LEARN AND TRACK GOVERNMENT GRANTS AND GRANT CONDITIONS.
In our world of technological development in Turkey and a company that makes and supports individual grants and grants to entrepreneurs. These incentives and services can be used by creating, documenting and presenting projects in stages. Within the scope of support programs; There are interest-free loans and grants in large and small amounts in company establishment expenses, machinery - equipment expenses, operating and employee salaries.
3) DELAY THE RENTAL COST AS MUCH AS POSSIBLE.
In the early days of your company, you won't need much of an office space. Renting an office without even knowing how many people your team will be can be quite difficult financially. You should avoid continuous expenses as much as possible. Considering that office expenses are very high in big cities, getting rid of these expenses for a while will allow you to breathe more easily in the first place.
Instead of renting an office and working there; You can even work in coworking areas, at home or in a favorite cafe. The only thing you need to pay attention to is not to break with the work discipline. Even if you're determined to go to the office, the next item is for you.
4) MAKE DEALS TO REDUCE OFFICE EXPENSES.
Remember that you can make advantageous supply agreements on expense items that will arise for the first time after going to an office with your team.
It is possible to make discounted agreements for your fixed expenses such as electricity and cargo.
5) DO NOT RUSH TO ESTABLISH A COMPANY.
Imagine staying with your car in traffic at rush hour; you cannot progress but your car continues to consume fuel. Establishing a company is exactly like this.
In the early days of your company, your income will unfortunately be low or not at all. The company will continue to incur expenses without listening to this.
If you are not selling yet, you do not need to receive payments and invoices other than cash, you should wait to incorporate. Yes, the excitement of starting a business, owning a company, is great, but delaying it until you have to actually set it up means more money left in your safe.
6) DON'T RUSH TO RECRUITMENT.
If you have hired a person and the job is not too much yet, you are spending money in vain. You are not a big IT firm during the establishment period and you do not have a huge workload (of course there is, but you can handle this). That's why every penny is valuable to you, and you need to pay close attention to these in order to survive financially.
The best time to recruit is when your team - most likely the founding team - can't keep up with current jobs. You may want to consider working with interns to help get things done until this time.
Other than that, only if you have no choice but to hire that person. Until then, keep doing everything yourself. Thus, when the recruitment period comes, you will know better which jobs you cannot catch up and which jobs you will transfer to the new person who will join the team.
7) USE YOUR ADVERTISING AND MARKETING BUDGET IN A CONTROLLED MANNER.
We know that neither a good product can survive without marketing, nor a good marketing campaign without a good product behind it. Still, a good startup team can always find ways to market for free in the first place. The most valid way to do this is through content marketing. You can turn your potential customers into customers by producing value-added content that will be interested in, find solutions to their problems.
3 steps of content marketing;
• Content production (article, e-mail, social media post, infographic)
• Spreading this content through marketing channels (social media, SEO, e-mail)
• Analyzing and improving content and working to increase conversion rates
It would also be good to research software where you can do free marketing activities. Here you can find some software suitable for your job.
Free marketing is like picking fruits from the branches of the tree closest to the ground. When you finish them, start spending money to access higher branches, the more accurate planning will be.
8) OUTSOURCE LAWYERS, HUMAN RESOURCES AND ACCOUNTING.
The success of an enterprise is mainly related to 3 areas; product development, marketing and sales. You can get outside support for positions other than these. First-stage startups often cannot afford a full-time accountant, lawyer, or human resources manager. Therefore, they must take on these roles themselves.
When this burden becomes unbearable, it would be best to get support from people you know around you or somehow outside, rather than employing full-time employees. It is very likely that you will not need any of these tasks full time until your volume grows enormous.
9) SAVE ON WEB HOSTING SERVICE.
It is quite natural that your website does not receive many visits in the early days of your startup. So you don't need to buy a costly hosting service for your website, at least for a while.
Using shared hosting services (shared hosting) will save you money until your site starts to attract a lot of traffic.
In addition, research and take advantage of loans offered by companies such as Amazon Web Services and Microsoft Azure. You may not need to spend any money for a while for server costs of thousands of dollars.
10) KNOW YOUR ACCOUNT AT OUTSIDE MEETINGS.
If you ask experienced entrepreneurs, they can tell you how much money they spent on their outside meetings.
You have to meet your potential customers, business partners or employees. That's why you have to meet them out often, and most of the time, you will pay for these meetings.
The choice is up to you, but it is useful to think logically; Whether you sit for longer and eat together, or just talk about essentials while drinking coffee, you pay less!
Do not make a wrong judgment after reading these; I should never take my customers out to dinner. Just be aware that this situation will occur very often and if you do not control it, you may experience financial difficulties in the long term.
11) IF YOU HAVE ACCUMULATED MONEY, CONSİDER IT SMART.
If you have saved some money for your venture journey, using it wisely can save you extra time. While you hold your money at 0% interest in your current personal account, you can save up to almost 10% interest in savings / savings accounts. So you see that there is no benefit in keeping your money in your individual accounts. With your money saved on the sidelines; You can invest in stocks, foreign exchange and precious metals on the stock market and increase your money. One thing you shouldn't forget is ;how much risk are ready to take.