1. Know Yourself: Understand Your Personal Financial Position Before diving into the finer details of your startup’s finances, it’s critical to understand where you, as a founder or co-founder, currently stand.

Based on the assessment of your own financial capabilities, and considering your industry and your business model, you will have a first idea of your runway - how many months your business can operate before it's out of money - and the best route to go between bootstrapping or seeking external funding, or even a mix of both.

Starting a venture with a personal financial cushion will definitely maximize your chances of surviving and succeeding.


2. Build a Simple, Actionable Business Plan

A business plan isn’t just a formality; it’s your map for reaching milestones. A robust plan should outline your goals, your operational plan, with a clear explanation of your business model, and incorporate the financial forecasts.

Keep it straightforward. An overly complex plan can stall progress, tying up resources that might be better allocated to product development and market entry. Start with a Minimum Viable Product (MVP)—a streamlined version of your service(s) or product(s) that fulfills essential needs of your target customers.

As you gather feedback, refine your business model, and adjust financial goals, you’ll avoid over-investing in early phases, staying financially agile and customer-focused.


3. Fundraising: Choose Your Capital Source Wisely

All startups need capital, but where you source funds can impact both control and growth.
Main funding options include your own personal finances or the company's generated profits (bootstrapping); or external sources such as angel investors, venture capital, crowdfunding, and loans. Each option has unique pros and cons that are important to understand so that you can design the best funding mix that aligns with your vision and long-term objectives.
The primary distinction here is that bootstrapping gives you control but requires disciplined cash management. It can be particularly challenging or even impossible in industries that demand high upfront costs, or operate under capital-intensive business models.

Alternatively, external funding can accelerate growth, though often at the expense of decision-making power. 


4. Create Financial and Cash Flow Projections  Cash flow is the heartbeat of any business. Accurate financial planning includes projecting future revenues and costs, with a close eye on cash flows, and your Cash Conversion Cycle if you manage inventory.

Revisiting your projections regularly based on actual historical transactions helps you understand how your business works, allowing you to spot areas of improvement and to stay responsive to changes. To have precise projections, you need to have great local knowledge, including specific knowledge of regional tax deadlines, regulatory changes, and other compliance requirements. In the Philippines for example, you need to anticipate your monthly, quarterly and annual tax payables.

5. Track and Evaluate Key Performance Indicators (KPIs)
Alongside financial projections, it’s essential to monitor financial Key Performance Indicators (KPIs). Keep tabs on key metrics like Solvency Ratios, including Total-Debt-to-Total-Assets; or Profitability Ratios like Gross Margin and Net-Profit-Margin. To be even more pertinent, KPIs can be used per segment, for instance, you can analyze and set Gross Margin objectives per business unit or per client. To streamline KPIs reports, you can leverage your accounting tool. Cloud-based solutions like Xero, QBO, or Odoo will allow you to streamline preparation of these reports.

Make Financial Planning Your Secret Weapon for Startup Success 
Financial planning isn’t just about crunching numbers; it’s about equipping your startup with the tools and clarity to navigate the challenges of growth. By prioritizing self-awareness, building a realistic plan, selecting appropriate funding sources, maintaining cash projections, and regularly reviewing performances, startups can forge a path to long-term success.

Need guidance on modern finance solutions? Connect with experts who specialize in helping growing businesses in the Philippines and Singapore. Whether you’re in the early stages or leading an established company, tailored financial solutions can streamline processes, integrate advanced technologies, and transform financial management into a core asset.