Five Business Hacks For New Entrepreneurs

• Taking a DIY (Do It Yourself) approach to building the stepping stones of your business, like a website, rather than hiring an expensive website developer can conserve cash and enable you to focus on building your product or service. 
• Choosing to serve a specialized market rather than an overly broad one can make it easier for customers devoted to your niche to find you.
• Even the best financial plan is an estimate of your forecasted revenues and expenses. As such, incorporate a contingency of 10 percent to your expenses to insulate you against unforeseen risks.

Starting a new business venture is like approaching your favorite amusement park ride—thrilling and hair-raising all at once. With most rides, your fears usually pick up speed right as the adventure is about to begin.
 

To help maneuver the twists and turns of any new start-up company, below is an outline of the top business hacks that every new entrepreneur should know.

There Are Riches in Niches 

The old adage, ‘there are riches in niches,’ holds true for new and mature businesses alike. When starting a new business, focus on a narrow sub-segment of products and services that you bring a new perspective to or that you can offer unmatched expertise or service.
 

For example, offering realtor services is broad, but specializing in realtor services for homeowners or investors who want to buy a house for the price of a car— well, that is targeted indeed. Narrowing your category of products or services to a profitable and underserved market helps you differentiate your offering from competing ones, confer you a competitive advantage, and help you build a loyal customer base.

Know Your Cashflow

Cash is the lifeblood of every company. A major factor derailing many new businesses, even before operational challenges rear their head, is running out of money. Understanding your cash inflows and cash outflows is key to positioning your business for success.

Inflows vs. Outflows

• Cash inflows are money from sales, that is, the sale of your services or products. Think about the money that you earn. 
• Cash outflows are the payments that you make. Think about the money that you spend.
   

For a new business, these outflows are usually marketing-related, like buying a domain name and hosting services for your website. Another example includes buying materials that you will use to make your product.

Thriftiness is your friend in the initial days of your start-up, as outflows will almost certainly outpace inflows. One area that offers room for conserving cash is using a DIY (Do It Yourself) approach to create an online presence and landing page for your business instead of paying someone to develop a high-end website with all the bells and whistles. 

Starting with only a landing page allows you to accomplish two objectives: 

1. Allows you to test your idea and refine it based on customer feedback rather than spending time optimizing a website.
2. Allows you to focus your cash flow on creating and selling your product or service.

Create a Financial Management Plan
 

The saying, ‘if you don’t know where you’re going, then any road will take you there,’ has never been more true than when it comes to a financial plan for your business.
 

A financial plan serves as a compass for your business. The first step in your plan is developing a forecast. A financial forecast should not be as intimidating as it may sound and can be done through an online budgeting tool, a spreadsheet, or good old-fashioned paper and pencil. 

What’s key is that you put a number to the dollar cost of your potential start-up and ongoing costs. Then, when your business does start making money, you gain a better idea of the dollar value of your potential sales and the sources of the financing you will use to pay for expenditures. Various funding sources include savings, a business credit card, or a personal loan.
 

Add Contingency Money to Your Business Financial Plan

Once you’ve developed your forecast and populated it with the expenditures, revenues, and available financing, you’ll need to add a contingency factor for those items you can’t think of. Why? Because your business, much like life itself, is bound to turn out differently, even if only a little, than how you planned it. 

A good rule of thumb is to budget a 10 percent contingency for expenses. For example, if you forecasted a total of $1,000 to be spent over the next 12 months on your business, add 10 percent, or $100 in contingency, for whatever surprise expenses may come along.

Stand the Business Up on Its Own Two Feet

The process of formally creating a business will help transform it from a seedling idea to a budding enterprise. But even if the business doesn't have its own employee identification number (an EIN is essentially a social security number for a company), it should have a bank account that is separate from your personal account to avoid commingling your funds. You can set up a business bank account by setting up a business account at the bank you use for your personal account or another bank.

What’s key is that business income and expenditures don't flow in and out of the same account you use to receive paycheck deposits or pay mortgage or car note expenses. Therefore, you want to keep as much distance between your personal and business accounts as possible. Doing so will allow your business to establish its own identity and take root, as well as help you to track your business finances and pinpoint any issues.

Establishing a business account at a bank different than your personal account can create an additional layer of separation between the two pots of money.

Protect the Golden Goose

The golden goose is you—your time, your finances, and your mindset. Your business has little chance of success if you personally are frozen with fear over your finances or if your mindset isn’t trained towards development. 

Addressing financial concerns like monitoring or making financial corrections to your credit report or paying down a credit card can be a good first step to building your discipline regarding your finances. 
 

Likewise, identifying an area for growth or improvement and finding a like-minded peer group to hold yourself accountable can help instill discipline for personal and business objectives.

The Money Wrap Up

Your investment in learning about the ins and outs of the business world can take away much of your fear. Once you establish your game plan for your business niche, create a business financial plan, and surround yourself with like-minded business owners, then you will put yourself in a position to succeed. Any hurdles along the way won’t seem impossible, and with the proper guidance, you can overcome any challenge.