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Startups must have a firm understanding of the financial basics. If you want to convince banks or investors that your business idea deserves investment, the most important startup accounting records such as income statements (incomes and expenses) and financial forecasts can be helpful.

Startup financials often come down to a single equation. You either have cash on hand or you’re in debt. Cash flow can be a challenge for young businesses. It is important to keep an eye on your balance sheet and be careful not to overextend yourself.

In the beginning it is likely that you will need to seek out debt or equity financing in order to grow your company and become profitable. Investors will be looking at your business plan, your projected revenue and costs, as well as the likelihood of getting an investment return.

There are many ways to help you bootstrap your startup. From getting a business card with a 0% APR introductory period to crowdfunding platforms, there are many options. However, it’s important to keep in mind that using debt or credit cards can affect your personal and company credit score, and you should always pay off your debt in time.

You can also borrow funds from friends and family members who are willing to invest. This could be a good option for your business, however it is important to put the terms in writing to avoid any conflicts and make sure everyone understands what their contribution will impact your bottom line. If you offer someone shares in your startup, they are considered an investor. Securities law is applicable to this.