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Countless factors must align for a small business to be successful. A founding team must put a realistic business plan in place, set long-term and short-term goals, secure ample funding, build the right team, and ultimately execute the fledgling company’s vision. Despite the fact that there are so many variables, there’s one item that causes more businesses to fail than all of the rest—finances.

Here are a few tips for small teams to avoid cash-flow woes.

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1. Track finances daily

Small businesses must track everything and stay on guard for concerning behavior on a daily basis.

Unfortunately, they don’t always have the bandwidth for such a minute level of detailed analysis. When that’s the case, it’s probably time to hire an accountant or financial team. If you’re not quite ready to grow your team yet, you can look into outsourced financial services.

These third-party solutions can function as a full-suite finance department. For instance, Uride, Avalon Fund, and Chainsafe Systems used AquiferCFO to streamline and optimize their finances in the beginning.

Either you or a third-party partner should be tracking and analyzing your spending on a daily basis. Don’t excuse expenditures as “necessary items” and then ignore their impact. Compare income and seed money with outgoing expenses and make sure you understand the length of your financial runway at all times.

2. Avoid overspending and larger unnecessary expenses

It may be worth it to invest in a third-party accounting firm when you know the investment will pay for itself quickly. However, now may not be the time to hire an entire marketing team or bring on a chief sales officer.

If you’re very early in development, you may not even be thinking of sales yet. In that case, you want to consider the cost of things like office space and tech stacks. Where is your overhead going? Are you a tech firm with too many engineers on staff?

It’s important to keep the C-suite particularly lean during these early stages. Harvard Business Review lists seven major C-level jobs, including newer titles like the chief information officer and chief supply-chain management officer. While these have their place in a thriving business, you shouldn’t invest in them too soon if you want to avoid cash flow concerns. Instead, look for those fractional, third-party support solutions (see the previous item).

In the same way that you should watch your daily expenses, make sure you aren’t missing the forest for the trees, either. Step back from time to time to get some perspective and keep tabs on larger spending trends.

3. Maintain transparency and communication

Finally, don’t keep people in the dark. Communicate your financial condition on a regular basis to any stakeholders. It’s tempting to shove financial concerns into the closet, but this only creates a more damaging impact if and when that information is revealed.

It’s particularly important to keep employees and partners in the loop.

Writing for Slack, Devon Maloney highlights how transparency can positively impact business interactions. Healthy communication builds trust, improves efficiency and performance, and ultimately helps you attract better talent.

From tracking daily financial activity to observing larger spending trends to maintaining transparency and communication, there are many ways that 2023’s small businesses can thrive.

The important thing is to take the financial issue seriously. Yes, you’re starting a business, and you have a lot of balls in the air at the same time. Just remember that some of them are more important than others.

At Byline, we take the time to get to know your business. Whether you’d like to improve cash flow, expand operations or update equipment, our team can customize financing and treasury solutions to help. Get in touch.

This article was written by Dave Kerpen from Inc. and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to [email protected].