Financial startup basics are the fundamentals that startups must know to ensure financial health and secure the funding needed to grow. Nine out of ten startup failures result from an absence of these basic elements. The reason is simple – cash flow. A startup this page that does not know how to track and forecast cash flow will not be able to manage its budget or invest in growth.

Investors need to see your startup’s financial projections and income statements. These models must be meticulously constructed to accurately reflect the true economics of your company which includes easy to overlook costs like shipping, taxes and insurance, processing fees, and utilities.

If traditional lenders aren’t an option, family and friends can lend money to startups in the beginning. In this scenario, however, it is important to have any loan terms written down to ensure there are no conflicting repayment obligations or future performance expectations.

Startups can also look for venture capital from a private investor or even crowdfunding platforms such as Kickstarter. However, these types of funding usually require an outline of the business plan which includes a thorough financial model. Making a model helps you to gain an understanding of the financials of your company, which allows you to make informed choices about how much capital you need and what strategic goals you’d like to achieve by the time next year rolls around.