Launching a multinational startup and growing it is no easy feat especially the finances. It gets very difficult to keep track of your finances and that is the beginning of your startup’s fall. To help you dodge that, here are some financial tips that you must follow if you are running a multinational startup.
1. Set Up Financial Goals
If you don’t know what it is that you want, there is no way you will be able to get it. The first step for any multinational startup should be to set up financial goals and objectives. The goals should be attainable and logical.
If the goals are irrational and are set too high, you may not be able to achieve them which can further demoralize your business. Similarly, if the bar is set too low, you will be able to easily achieve your aims but you won’t know if you’re on the right track. Establishing goals for a period of time will allow you to know whether or not your startup is on the right trajectory of growth.
The goals you set should also be flexible because, for numerous reasons, you might have to make some adjustments as your business progresses. You can create two sets of goals for your startup- short-term and long-term. This will allow you to create a more specific plan of action.
2. Limit Fixed Expenses
Fixed expenses contribute towards a major portion of the expenditure of all businesses. For multinational startups, fixed expenses are generally pretty high because of the various things that need to be taken care of during the initial stages of the business.
These expenses get even higher when startups are trying to establish their businesses in a foreign country. You need to keep fixed expenses in check if you wish to grow your business.
Take a look at your expense sheet and make a note of all necessary expenditures and ones that you can do without. Spending your limited capital wisely consists of limiting fixed expenses only to the ones that are essential for your business operation.
Splurging on expensive offices and business trips with limited capital will prevent you from investing in important aspects that will help your start-up grow.
3. Understand Regulations of Different Countries
Different countries have different financial regulations. As a multinational startup, you must keep this point in mind. A lot of businesses make the mistake of not considering the different regulations in different locations unknowingly.
This can cost you heavily in the long run and can even lead to the closure of your startup. Before making any financial decision, you need to carefully study the financial regulations of all countries your startup is operating in.
4. Monitor Cash Flow in All Locations
10% of startups fail within the first year of business. A major reason for this is that they fail to monitor cash flow properly. Managing cash flow in one country is difficult in itself but doing that for multiple locations across various countries is even more difficult.
However, it is important to carefully monitor the different streams of income and expenditure otherwise you might end up spending more than you’re earning. Hiring professional accountants Geelong can help you better monitor your cash flow accurately.
5. Maintain Creditworthiness
Your multinational startup will not receive any funds from banks and investors if you have a poor credit score. A poor rating will indicate that you often default your loans whereas a good credit rating will show potential investors that you pay back in time and are careful with your finances.
Thus, you’ll get more funding which will help you grow your startup. You should also try and gain a good rating from reputed credit agencies of the countries where you wish to expand in the future as that will make an even better expression on the investors.
6. Hire Professionals to Manage Business Overseas
As your startup grows, it will become difficult to manage all the financial aspects on your own. You should hire reputed professionals to help you keep a close watch on the finances overseas.
These professionals will make it easier for you to keep a track of your finances and provide you with better insights on future growth prospects- thus, helping you improve your financial strategy.
Stick to these financial tips and your multinational startup is bound to grow and succeed.
You could partner with an Employer of Record (EOR) that can provide you with local expertise and support so your HR always stays in compliance with local labor regulations.