The financial startup basics are the fundamentals that startups must know to ensure their financial health and secure the funding needed for growth. Nine out of ten failures in startups are caused by the absence of these fundamentals. Cash flow is the primary reason. Without a grasp of how to track and project cash flow, startups cannot manage its budget or invest in growth.

Investors need to see your startup’s financial projections and income statements. These models need to be calculated carefully to accurately reflect your company’s economics. This includes easy-to-forget expenses such as shipping taxes and the cost of insurance, payment processing fees and utilities.

If traditional lenders aren’t available family members and friends can lend money to startups in the beginning. However, in this scenario it is crucial to write board room any loan terms in writing so that there aren’t any conflicts over repayment obligations or expectations for future performance.

Startups may also seek venture capital from an individual investor or crowdfunding platforms such as Kickstarter. However, these kinds of financing usually require an approved business plan that includes a detailed financial model. Creating a model allows you to gain a better understanding of the financials of your business, allowing you to make educated decisions regarding the amount of capital you need and what strategic goals you want to meet by next year.