A startup budget is essential for any entrepreneur looking to run their business without the help of investors.
Did you know that only 50% of businesses with employees survive five years?
To make sure you survive for five years and longer, you need to have a startup budget that really works. Without the money you need, you won’t be able to get your business on a budget and get it off the ground.
Continue reading this article to learn more about setting up your new business budget.
1. Set Your Goal Budget & Essential Costs
You might not have all the money you want in the beginning, but you do need to have a goal. Setting a goal for your budget will let you know exactly how much money you need to get to where you want your business to go.
If you’re not realistic, this will bring you down to earth and help you see how far you are from where you want to go.
Once you see where you are, you should look at your essential costs and focus on those first. This is likely where you’ll need to operate right out of the gate until you get more money.
2. Map Out Your Overhead
Your business will have some fixed costs, which are known as overhead costs. With overhead costs, they stay virtually the same each month.
Some common overhead costs you might have are:
- Internet & phone
These costs also include anything else you need to run your day-to-day operations.
3. Estimate Any Variable Costs
Each month you might have different costs come up, but you likely have an idea of what they are. These variable costs might change from month to month, or you might pay for them one month but not the next.
If you hire freelancers or need to buy office supplies in bulk every 90 days, then there would be variable costs.
4. Determine Monthly Revenue
Since you’re a new business, you might not be sure how to do this. The truth is that you might be way off when you’re starting, but you have to do a couple of types of projections. This is demand forecasting or sales forecasting.
One projection you need to do is optimistic, and the other is conservative. What’s the best that could happen? And what’s the worst that could happen during your first months of business?
5. Do the Math
Now that you have all of the numbers in your hands, it’s time to do the math. Look at your monthly revenue and figure out if you’re coming out even, ahead, or behind.
Many people find out they need to speak with a company like Rightway Funding to help their startup get going. Most businesses don’t start as self-funded, and getting outside help can make those first few months a little easier.
Become a Startup Budget Pro
Now you know more about setting up a startup budget and how to make your business work. With the information above, you can get your business off on the right foot.
Do you want to learn more about business? Continue through our blog for the help you need.
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