Fundamentals of financial startup are the ones that every startup should know to ensure their financial stability and secure the funds they require for growth. Without these fundamentals, nine out of ten startups fail. Cash flow is the reason. Without understanding how to track and forecast cash flow, startups is not able to manage its budget or invest in growth.

Key startup accounting records like income statements (revenue and expenses) and financial projections financial startup basics are necessary to prove the viability of your business model to investors. These models must be meticulously calculated to accurately reflect your company’s true economics which includes cost that are easy to overlook such as shipping, taxes and insurance, payment processing fees, and utilities.

If traditional lenders aren’t a viable option family and friends may provide financing to startups in the beginning. In this scenario however, it’s important to have any loan terms outlined to ensure there are no conflicts over the repayment obligation or future performance expectations.

Startups can also look for venture capital from crowdfunding platforms or private investors such as Kickstarter. These types of funding typically require a business plan that includes a comprehensive financial forecast. You can gain a better understanding of your company’s finances by constructing a model. This will allow you to make educated decisions about how much capital to invest and what strategic goals you want to achieve over the next year.