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Yafit Keret, Co-Founder & CEO Proximo
As an experienced CFO in the startup ecosystem, I’ve seen first hand the unique challenges we face during turbulent times. With the ongoing war and economic volatility in Israel, crafting a strategic budget for 2025 is not just smart; it’s essential for our survival and growth. Here are some of the key points that I address when working on my companies 2025 budget and forecast.
Given the uncertainty around when the war might end and the potential economic shifts that could follow, it's more important than ever to stay prepared. We don’t have a crystal ball to predict the future, but we can certainly plan for it. By building out several budget scenarios—optimistic, pessimistic, and moderate—we give ourselves the flexibility to adapt no matter what comes our way. For startups, this approach is especially valuable, as it helps manage risks tied to currency fluctuations and changing markets. It’s all about being proactive; planning for the best while being ready for any bumps along the road.
Securing funding is increasingly difficult right now, with investors exercising caution. This makes it critical for all startups to focus on extending their runway. A well-structured budget enables us to allocate resources efficiently, ensuring operations can continue even when external funds are scarce. Moreover, this is an opportune moment to explore alternative financing methods—government support programs, grants, venture lending, and other innovative funding solutions. Diversifying our funding sources is key to maintaining stability and resilience in these challenging times.
Currency fluctuations can significantly influence financial health, especially for startups that often secure funding and generate revenue in US dollars. Regularly reviewing the interest and exchange rates offered by banks is crucial. By actively managing these variables, we can extend our runway and reduce potential losses.
As interest rates continue to climb, the cost of borrowing is becoming a significant concern. This is where a detailed budget and financial forecast come into play. Now is also the time to consider extending loans and debts, allowing us to negotiate longer payment schedules with our lenders. By factoring in potential increases in debt servicing costs and examining various scenarios, we can better understand our financial obligations and manage our operations more strategically.
Given the dynamic nature of our current environment, it’s imperative to review our budget scenarios on a quarterly basis. This approach enables us to pivot quickly based on market changes, internal performance, or global events. Maintaining this level of agility ensures that we can seize new opportunities and navigate challenges effectively.
For Israeli startups, crafting a detailed budget for 2025 with multiple scenarios isn’t just a necessity; it’s a vital strategy for resilience. By proactively addressing fundraising challenges, currency fluctuations, and rising debt costs, we’re setting ourselves up for long-term success. The startups that emerge from this crisis will be those that embody strength, lean operations, and that famous Israeli *chutzpah*—the secret ingredient that drives our innovation. With the right financial strategies in place, we’ll be ready to tackle whatever comes next!