If you’re an entrepreneur about to launch a business, you’ll soon discover that managing your company’s finances is an ongoing activity. And as you probably realized when you developed your business plan, knowing your numbers is essential.
With so many aspects of your finances to consider – expenses, income, profits, losses, etc. – it can be a challenge to determine which numbers require the most focus. Here are three to note.
Your burn rate
Smart entrepreneurs anticipate and estimate their “burn rate”: the rate at which a company spends its capital to finance itself before generating positive cash flow. Knowing your burn rate will help you ensure your monthly expenses are on track, and help you determine how long it will take for your initial capital to run out.