You chose to become a millennial entrepreneur because you craved a flexible work schedule and a goal that drives you to get out of bed every morning. You also valued the financial freedom that comes with being a successful entrepreneur.
In this article, we give you some tried-and-tested financial tips for young entrepreneurs.
Tip#1 Start out with a solid and flexible business plan
Because your finances are intricately tied to your business, your primary focus should be its growth.
For creating a solid business roadmap, ask yourself these questions –
- What is my target market?
- What is my competitive advantage?
- What do I need to charge for my products and services to make sustainable profits?
A formal business plan can be solid without being concrete. Make room for changes along the way based on technology disruptions, risk assessments, future market conditions, etc.
A well-thought-out and organised business plan will help you –
- Know an estimate of all initial costs
- Convince investors or lenders to fund your business
- Estimate your revenue by defining your target market
- Analyse your competitors and deliver value where they lack
Additional Read: Why Do Millennial Women Take More Loans Than Men
Tip#2 Create a detailed and realistic budget
Once your business plan has given you a financial direction, the next step is to create a budget to walk towards it. A budget helps millennial business owners know exactly where their money should go and how they can cut down on unwanted expenses.
First, gather all your income sources. The next step is to determine all fixed costs – rent, website hosting, payroll costs, etc. Then, estimate your variable expenses depending on the business and its location. For example – travel costs, shipping costs, utility costs, etc.
Predict all one-time spends. From the example above, you may incur expenses on a new laptop or a business-related course that you wish to pursue in the near future. Add a buffer for unexpected expenses down the line. For instance, your work equipment may need fixing, or there may be payment delays from customers. Finally, bring these all together – tally your total income to expenses – to determine overall profitability.
Tip#3 Network, as often as you can
Combine what you know with who you know for financial insights. Those who have walked this path before you can educate you on financial roadblocks that may arise. Plus, networking also expands your reach to new clients, partners, and mentors.
Tip#4 Consider a line of credit
If you need help with the funding, don’t be afraid to ask for it. An easy business loan will not just make funds available when you need them but also keep your personal accounts intact. Since the credit fund replenishes after you’ve repaid the full amount, you get to have more control over your funds.
Need some help funding your entrepreneurial dreams? Tata Capital has you covered! We are India’s leading lending institution, offering the most market-beating business loan interest rates. Apply for a loan amount anywhere from Rs. 5 lakhs to Rs. 75 lakhs for a tenure up to 3 years and get the business ball rolling.
Check out our business loan eligibility and documentation requirements here.