Inventor Insight: Don’t go broke building your business

For any new entrepreneur, money is often perceived as the biggest hurdle to getting their venture started. The reality is that money is always going to be an issue in your business. You have to develop a strategy and manage the money from the very beginning. Whether you are going to bootstrap it yourself, take out a loan, look for angel investment or venture capital, it is always about how you manage your dollars not just how much you have.

The key to success for a new entrepreneur (and even those who are trying to grow their business) is strategy. It pays to spend time planning so you can avoid the most common mistakes, learn and understand how cash flows through your business, and find good mentors who can offer advice. I sat down with Stephanie Artino, of the Artino Advisory Group here in Bellingham, to find out what money management advice she has for entrepreneurs looking to start or grow their business.

Common mistakes

I started by asking her about the biggest mistakes entrepreneurs make when getting started. “They fail to adequately estimate the total funds needed for startup (plus the first year of business) and making sure those funds are readily available/accessible when needed.” She says. “Most entrepreneurs make a good effort to be prudent with their budgets, but often forget to build in a cushion for unexpected expenses. This cushion should also take into account potential delays in collecting cash from customers or lower sales.” Often times entrepreneurs underestimate what the actual costs may be by half and should consider a cushion to double or even triple expenses.

Entrepreneurs who use money that is not their own, like loans, investors, friends/family, or crowdfunding may be especially at risk for these mistakes. Stephanie explains, “This can be dangerous to cash flow when it comes time for repayment. There is also a definite correlation between mental buy-in by entrepreneurs when more of their own money is at stake. “

Manage cash flow

In addition to building a strategy around the budget, it is important for entrepreneurs to strategize how money will flow through their business. Cash flow is all about knowing when cash comes in, when you will need it and where it goes back out. “A little planning up front can help set you up for success much faster” Stephanie suggests. “Failing to do so can put you in a cash crunch that can delay your ability to start on time, create additional expenses or other problems, sometimes big ones.”

Do what works for you

New entrepreneurs and even some seasoned business owners are often hesitant, confused or even frustrated by the financial forecasting they need to do for their business. So I asked Stephanie what advice she has to help ease those issues. “Make it easy for yourself.” She says, “Planning doesn’t have to be complex or in a certain type of format. What works for one person might not work for you.” She continues on by suggesting that guidelines and templates can be good references, but that ultimately it has to make sense to the entrepreneur. “Most importantly, don’t get caught up in doing it right that you don’t plan at all. As long as you are spending the time planning and doing what works for you, it will help you in the long run.”

Strategy and management of the financials are important aspects of doing well in a new or growing venture. As a person who struggled in the beginning to understand the financials in my own business, I know how intimidating it can be. However, learning a few basic accounting skills and outsourcing the financial jobs to people who are really good at is a smart investment in your business.

This is one in a monthly series about topics of interest to entrepreneurs. Lara Merriam-Smith is the program manager for NW Innovation Resource Center, a Bellingham-based organization that supports economic opportunities through entrepreneurial innovation in northwest Washington. It helps inventors looking to take products to market and connects new start-up businesses with resources to help them grow. For more information online go to


Stephanie Artino of the Artino Advisory Group here in Bellingham will speak about financial planning at the Inventor Insights event from noon to 1:30 p.m., Wednesday, Nov. 4 2211 Rimland Drive, Room 106. The event is free, but register in advance at, or call 360-255-7870.