Founders – Don’t Forget To Manage Your Own Personal Finances
We’ve heard it all before – startup founders who try and make every dollar stretch while trying to build “The Next Big Thing”. To save money, they do things that run the gamut from eating ramen noodles every night to sleeping over on friends’ couches (until they get thrown out, that is), all the time waiting to hit pay dirt.
The trouble is that while many of these founders may keep a paranoid eye on their company accounts, some neglect their own personal finances.
Here are some ideas how startup founders can properly manage their personal finances:
Make sure you have a proper financial plan.
Keep track of your personal expenditure – you’ll be able to see where your money is coming from and where it is going to. This way you can plan out your financial outlook and know where the loopholes are.
Some founders I know, in an attempt to make their company accounts look better, omit paying themselves a salary. That’s incredibly silly, and open themselves to an unrealistic view of managing company finances.
If you’re lucky enough to be funded, definitely pay yourself! In fact, even if your startup isn’t in the black yet there’s no reason why you shouldn’t pay yourself a small sum to help cover living expenses. It will help you keep going both financially and mentally.
Manage your credit well.
If you’re like many startup founders, you’re likely to have borrowed heavily from friends and relatives to start your company. Some of you may also have tapped out (any and every) available credit lines. Reassess your credit needs, and be don’t be afraid to switch banks if you need to refinance – some bank accounts in 2013 may just offer a better deal.
And if you’re still studying while starting up, there are also great value accounts for students that you may want to consider.
As a startup founder, it would be a crying shame to being personally financially ruined before your company finds success. Sometimes the light at the end of the tunnel takes a while in coming. In the meantime, make sure your torch has enough battery in it.
Daniel Goh is the founder and chief editor of Young | Upstarts, as well as an F&B entrepreneur. Daniel has a background in public relations, and is interested in issues in entrepreneurship, small business, marketing, public relations and the online space. He can be reached at daniel [at] youngupstarts [dot] com.