What to do when you run out of money while running a startup - FasterCapital (2024)

1. Define your goals

As a startup, it can be easy to run out of money. You might be focused on growth and not profitability, or you might have made some bad financial decisions early on. Whatever the reason, if you find yourself running out of money, it's important to take action quickly.

One of the first things you should do is define your goals. What are you trying to achieve with your startup? Is it to make a profit? To grow quickly? To build a great product? Once you know your goals, you can start to figure out how to achieve them.

If your goal is to make a profit, then you need to focus on generating revenue. One way to do this is to increase prices on your products or services. If you're selling a product, you could also try to sell more units. If you're providing a service, you could try to get more clients.

If your goal is to grow quickly, then you need to focus on acquiring new customers. One way to do this is to offer a discount on your products or services. You could also try marketing your business more aggressively or expanding into new markets.

If your goal is to build a great product, then you need to focus on making your product better. One way to do this is to add new features or improve the quality of your existing features. You could also try to make your product more user-friendly or improve customer support.

Whatever your goal is, it's important to take action quickly when you run out of money. defining your goals and figuring out how to achieve them will help you get back on track and keep your startup afloat.

2. Cut your losses

As a startup founder, you are likely to face many challenges and obstacles. One of the most difficult challenges is running out of money.

When you run out of money, it is important to take action immediately. The first step is to cut your losses. This means reducing your expenses and cutting back on non-essential spending.

Next, you need to raise more money. This can be done through investment, loans, or other sources of funding.

Once you have raised more money, you need to focus on growing your business. This means generating more revenue and increasing your profitability.

If you take these steps, you can overcome the challenge of running out of money and keep your startup afloat.

3. Prioritize your expenses

When you're running a startup, it's important to be mindful of your spending. You may not have a lot of money coming in, so you need to be careful with how you're spending your money. One way to do this is to prioritize your expenses.

Some expenses are more important than others. For example, you may need to spend money on office space, equipment, or salaries. These are all necessary expenses that you can't do without. Other expenses, such as marketing or advertising, can be put off until you have more money.

You also need to think about which expenses will have the biggest impact on your business. For example, if you're trying to save money, you may want to cut back on your advertising budget. However, if you're trying to grow your business, you may want to increase your marketing budget.

Finally, you need to consider your long-term goals. Some expenses, such as research and development, may be important for your long-term success but may not be necessary right now. You need to balance your short-term needs with your long-term goals.

Prioritizing your expenses can be difficult, but it's important to do if you want to be successful. Take the time to think about what's most important for your business and what you can live without. By being mindful of your spending, you can ensure that your startup is successful.

4. Fundraise

The best thing to do when you run out of money while running a startup is to raise more money. This can be done by either finding more investors or by generating more revenue.

If you're running out of money, it's likely that your business isn't generating enough revenue to sustain itself. In this case, you'll need to focus on generating more revenue. This can be done by finding new customers or by increasing your prices.

If you're having trouble finding new investors, you may need to reconsider your business model. Make sure that your business is attractive to investors and that you have a clear plan for how you'll use their money.

If you're running out of money and you're not sure what to do, the best thing to do is to ask for help. talk to your investors, your mentors, and your friends. They'll be able to give you advice and help you figure out the best way to proceed.

5. Make more money

If you're like most startup founders, you're probably always looking for ways to increase your company's revenue. But what do you do when you suddenly find yourself running out of money?

Here are a few things you can do to make more money:

1. Get creative with your pricing

If you're selling products or services, take a close look at your pricing strategy. Could you be charging more for your products or services?

If you're not sure, do some market research to see what your competitors are charging for similar products or services. You may be surprised to find that you could be charging more than you are currently.

2. Increase your sales efforts

If you're not selling enough products or services, then you need to increase your sales efforts. This may mean hiring more salespeople, doing more marketing, or finding new and innovative ways to reach potential customers.

3. Cut costs

If your expenses are too high, then you need to find ways to cut costs. This may mean downsizing your office space, negotiating better deals with vendors, or cutting back on non-essential expenses.

4. raise money from investors

If you're running out of money, one option is to raise money from investors. This can be a difficult process, but it may be necessary to keep your startup afloat.

5. Take out a loan

Another option is to take out a loan from a bank or other financial institution. This can be a risky move, but it may be necessary if you're running out of money and need some extra cash to keep your startup going.

No matter what situation you're in, it's important to take action quickly if you find yourself running out of money. By taking some of the steps above, you can increase your chances of keeping your startup afloat and eventually turning it into a successful business.

Make more money - What to do when you run out of money while running a startup

6. Find a cheaper place to live

If you're a startup founder, there's a good chance you're living on a tight budget. And if you're living on a tight budget, there's a good chance you've run into some financial problems.

If you find yourself in a situation where you're running out of money while running a startup, there are a few things you can do to try to get back on track.

First, take a look at your expenses and see if there are any areas where you can cut back. For example, if you're paying for office space that you're not using, see if you can sublet it or find a cheaper place to work.

Second, see if there are any other sources of funding that you can tap into. This could include friends and family, investors, or even government grants.

Third, consider ways to increase your revenue. This could mean looking for new customers or partners, or finding new ways to monetize your product or service.

Fourth, if all else fails, you may need to consider shutting down your startup. This is obviously a last resort, but it's important to know that it's an option if you can't seem to get things back on track.

No matter what you do, remember that running out of money is not the end of the world. With some careful planning and a bit of luck, you should be able to get your startup back on track.

7. Let go of unnecessary expenses

If you're running a startup, you know that every penny counts. So, what do you do when you find yourself running out of money?

First, take a step back and assess your situation. What are your monthly expenses? Are there any areas where you can cut back?

Once you've identified areas where you can save money, it's time to start making some changes. Here are a few suggestions:

1. Let go of unnecessary expenses

One of the quickest ways to save money is to eliminate unnecessary expenses. If there are any expenses that are not absolutely essential to your business, get rid of them. This may mean cutting back on marketing or travel expenses.

2. Negotiate with vendors and suppliers

If you're already working with vendors and suppliers, see if you can negotiate better terms. This could include longer payment terms or discounts for bulk orders.

3. Reduce your burn rate

If you're burning through cash too quickly, you'll need to find ways to reduce your burn rate. This may mean cutting back on staff or reducing your office space.

4. Seek out alternative sources of funding

If you're running out of money, it may be time to seek out alternative sources of funding. This could include venture capitalists, angel investors, or even crowdfunding.

5. Delay non-essential spending

If you have any non-essential spending, such as new office furniture or equipment, try to delay it until you have more cash on hand.

making these changes can be difficult, but they may be necessary to keep your startup afloat. So, don't be afraid to make some tough decisions and cut back on expenses.

Let go of unnecessary expenses - What to do when you run out of money while running a startup

8. Get a side hustle

If you're running a startup, chances are you're not making much money. In fact, you may be running out of money. And that's OK. It's part of the journey.

The important thing is to keep your head up and keep moving forward. One way to do that is to get a side hustle.

A side hustle is a way to make money outside of your full-time job. It can be anything from freelancing to starting your own business.

There are a few things to keep in mind when choosing a side hustle:

1. Make sure it's something you're passionate about.

2. Make sure it's something you're good at.

3. Make sure it's something you can do on your own time.

4. Make sure it's something that will actually make you money.

Once you've found the perfect side hustle, it's time to get started. Here are a few tips:

1. set aside some time each week to work on your side hustle.

2. Get organized and create a schedule.

3. Don't be afraid to ask for help from family and friends.

4. stay motivated and focused on your goals.

5. Most importantly, have fun!

Running a startup is a challenging and rewarding experience. It's not always easy, but it's definitely worth it. And if you ever find yourself running out of money, just remember that a side hustle is a great way to keep your head above water until your startup takes off.

Get a side hustle - What to do when you run out of money while running a startup

9. Stay positive

When you run out of money while running a startup, it can be a very difficult and stressful time. However, it is important to stay positive and to remember that this is just a temporary setback. There are a few things you can do to help you through this tough time.

First, try to cut costs wherever possible. This may mean making some tough choices, but it will help you save money in the long run. You may need to let go of some employees, or reduce your office space.

Second, try to raise more money. This can be done by pitching to investors, or by looking for other sources of funding.

Third, focus on your core product or service. This is the time to really focus on what your business does best and make sure that you are providing the best possible product or service to your customers.

Fourth, keep your team motivated. This can be a difficult time for everyone, so it is important to keep your team focused on the goal. Remind them why they started the company in the first place and what the company's mission is.

Finally, stay positive. This is a difficult time, but it is important to remember that it is just a setback. stay focused on your goals and keep moving forward.