Investments

The financial and investment components are highly crucial to making a startup successful. How much money is there to fund daily operations or long term projects? What resources should be allocated to a given project to make it produce quality results? Who wants to fund us? Do we have a big enough team?

Building income statements and balance sheets help you understand your operating expenses on a day to day, month to month, or year to year basis depending how an organization manages their finances. The finances are important as they tell how well your company is doing, where it is predicted to go in regards to profit and revenues, establish commitments to projects, and measure progress. Any money made can be investment into new projects and expansion and helps with providing flexibility for the direction the company will go in.

This also becomes a part of the motivation for attracting new employees and investors. An interesting point is that by investing in employees, organizations are more likely to flourish and have better results on projects. By empowering employees to feel as though they have an impact in the organization, several internal factors occur such as employee retention and morale increase. An externally based factor is that the company's reputation is more likely to be spread in a positive light with a healthier culture.

It sounds very straight forward, but for someone who has taken a number of finance and accounting classes, I still find finance overwhelming an overwhelming topic. I definitely understand investing in employees and maintaining a budget, but I cannot find motivation to make money the main driver for a startup or at least interesting enough for me to learn more. For anyone that has struggled with finances, what were some of the steps you've taken to overcome this knowledge barrier? As someone looking to begin a social venture, I acknowledge that I do not have the necessary skills to manage a startup on my own. Without any financial stability, the startup will have a high possibility of failure.