Top Six Tips for Budget Planning For New Business

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This is where your contingency fund comes into play – another very important part of your start-up plan. To determine the amount of money needed as a contingency fund, take what you currently have plus any additional cash needed until your business can stand on its own two feet without needing a subsidy from your personal account.


There are many reasons why people decide to start their own business. Some want more control over their working hours, while others long to be their own boss. For some, it’s the desire to do something different or create that “ideal” product or service they’ve always dreamed of introducing into the marketplace.

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Whatever your reason for starting a business may be, one thing is certain, you’ll need to have a well-thought-out plan before opening your doors for business. It goes without saying, you’ll need financial resources — capital — to build this vision of yours into a reality. You know what they say about all great plans having solid foundations. And that costs money! So how much money will you need? The following 6 tips on how to plan your budget will help you figure that out.

  • Know Your Business Needs

Before you can determine how much money you need to start your business, you’ll first need to know what it is that your business does and the products or services it will offer. Knowing how much money you’re going to invest in the company and overhead costs such as payroll, taxes, the cost of getting a registered office address and other expenses is vital for planning a budget. To do this, you must know how to calculate your fixed costs and your overhead costs.

  • Determine The Number Of Months You Will Need to Break Even

To determine the number of months it will take you to break even on your investment, divide the total cost needed to start your business by your projected monthly net income after overhead costs are paid. This is how many months it would take you to pay off all opening expenses if no new business came in during this time.

  • Determine The Additional Cash You Will Need to Keep Your Business Afloat

Let’s face it, there are times when our business doesn’t generate enough revenue to cover expenses during that period. Perhaps you’ve hired staff only to realize it would be difficult for them to find clients right away, or you thought your marketing campaign would attract more customers than it did. So now you’re stuck with overhead costs but no income coming in.

This is where your contingency fund comes into play – another very important part of your start-up plan. To determine the amount of money needed as a contingency fund, take what you currently have plus any additional cash needed until your business can stand on its own two feet without needing a subsidy from your personal account.

  • Use An App

If you’re a bit of a techno-geek, then why not try an app to help calculate your budget? There are many to choose from. When choosing an app to help with your budget, consider the following factors: The number of features and functions that will best suit your business needs and operations; How user-friendly and intuitive it is and whether or not you will be able to access it from different devices when you’re on the go.

  • Get Professional Help

Perhaps the best way to determine your budget for starting a business is by getting some professional help. There are plenty of business advisors who can come up with an accurate projection based on their own experience and advice tailored specifically to your business needs. How much this service will cost depends on the complexity of your business but it’s worth considering, especially if you’re venturing into uncharted territory or if you don’t know where to begin.

When choosing a professional to help with your budget, consider the following factors: The number of years they have been in business and their success rate; How experienced they are with small businesses; Whether or not you feel comfortable interacting with them on your own terms

  • Be Realistic About Your Startup Budget Plan

Many hopeful entrepreneurs make the mistake of planning big-dreaming big, hoping for big profits and cash flow, only to become disappointed when things don’t turn out as planned. You can avoid this by keeping your budget realistic and making sure the numbers add up. To illustrate the importance of planning your budget realistically.

 

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When deciding on a budget, consider what needs to happen in order to reach that goal – and then plan accordingly. The key is not to be afraid of making mistakes along the way as long as you learn from them and adjust accordingly. The first step is always the hardest but once you’re there, it’s only a matter of doing it over and over again until you get it right.

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