The financial startup basics are the essentials that startups need to know to ensure their financial health and secure the funding needed to expand. Without these fundamentals nine out of 10 startups fail. Cash flow is one of the reasons. A startup that does not know how to monitor and forecast cash flow will not be able to manage its budget, or invest in growth.

Investors should be able to view your startup’s financial projections and income statements. These models have to be carefully calculated to accurately reflect your business’s economics. This includes easy-to-forget costs like shipping, taxes and insurance, processing fees and utility costs.

If traditional lenders aren’t a viable option, family and friends can help startups with financing in the early stages. But, in this case it is crucial to write the terms of any loan in writing so that there are no disagreements regarding repayment obligations or expectations for future performance.

Startups may also look for venture capital from an individual investor or crowdfunding platforms like Kickstarter. However, these types of financing usually require a written business plan that includes a comprehensive financial model. A model can help you to gain a better understanding of the financials of your company, allowing you to make informed choices regarding the amount of capital you require and what strategic goals you want to achieve by the end of next year.

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