Managing and running your own business is no cakewalk. It requires strategic planning, setting long and short-term goals, finding the right funding options, and planning ahead of emergencies. Being an entrepreneur might sound lucrative and fancy, but it is a difficult job; one that is laden with challenges at every step of the way. Running a business effectively under even normal circumstances is a cumbersome job. Therefore, it is quite understandable that doing the same under extraordinary circumstances could take the heart right out of entrepreneurs.
The COVID-19 crisis has delivered a severe blow to entrepreneurs of startups as well as big companies. While the big names in the industry have been able to absorb the shock and stay afloat, most startups in the nascent stages and small businesses have perished in the face of the pandemic. However, that has not stopped the deadlines for tax and loan payments from approaching nearer. Businesses still needed to pay up and to keep the loan sharks at bay. And this what complicated the situation, furthermore.
While government support to postpone the dates for tax payments has been vital, these measures were time-bound. Sooner or later, debts must be cleared, and taxes must be paid. As such, the odds of startups and small businesses surviving the crisis seem incredibly low. Thus, alternate solutions need to be explored. Fintech innovation seems to be a measure that can help startups wade through this crisis and stay afloat. On that note, let us look into the ways fintech can help businesses survive the financial doldrums.
How are Fintech Innovations Helping Businesses Navigate the Crisis?
A large number of fintech offerings have started helping businesses, especially the small-scale ones, to forecast their cash and have better cash optimization strategies at their disposal. The technological advancements in the financial sector have helped young entrepreneurs manage their monthly cash flow and stay afloat even amidst the crisis. Though government aid has been aiding these early-stage startups and small businesses, it is not enough, and more evolved solutions are the need of the hour. That said, let us look at a few of these options and learn how they have been helping businesses stay put.
Fintech Solutions Have Brought Automation in Financial Planning:
One of the biggest reasons for most startups to fail and not just during this crisis is a lack of awareness of the means that can help them generate enough revenue. Data show that only about 40 percent of startups make a profit and 30 percent are able to merely break even. This stems from a lack of proper financial management and cash optimization software and tools at one’s disposal. However, more and more startups are using these tools, and this has been successful in bringing automation to financial planning. There are a number of financial planning software products and tools that can help manage this aspect, most of which can be downloaded easily.
Fintech Innovations Help in Invoice Financing:
There is a hoard of financing technology available on the market, and each of them has a set of unique features that they can bring to the table. These tools can help startups maintain a steady cash flow. They help companies borrow money to pay off unpaid invoices via online portals. This makes the process quick and hassle-free and also reliable enough for companies to borrow the required money.
Fintech Innovations Help in Easing Bank Payments and Book Keeping:
There are other fintech innovations as well that smoothen out financial operations and that too on a budget. Tools such as Stripe are highly cost-effective and have a user-friendly interface. They help provide a safe platform for internet-based companies to transfer money to their business account from a customer’s bank account via credit or debit cards. Revolut is yet another fintech solution that eases out business payments and keeps track of every transaction, revenue raised, salaries rolled out, and also helps manage the cash flow. This has become one of the favorites of startups since they get different features and all on the same platform.
Startups looking to bring in ease in accounting can also look for Xero, which is a brilliant accounting tool. This is a cloud-based system that comes in handy for small businesses and allows people to access the financial numbers. The tool keeps the accountants and bookkeepers in the loop and helps startups make important financial decisions.
Fintech innovations have served as a welcome relief for startups and small businesses, especially in these grueling times. Therefore, for startups looking for options to bring in more ease and efficiency in their finances, options in fintech innovations can be explored. These tools and software can help startups stay afloat and mitigate the crisis.