Startups need budgets, at their very core, to make sure they set up properly and get going with a good eye for their profit margin.
The more money you save during the foundation of your business, the more resources you have to put to use during the first 6 months to a year, which is when the biggest and heftiest problems are likely to occur for a small business.
And according to research, a lot of potential problems can be piled onto an owner’s plate. Knowing your market, finding your customer base, becoming a part of your local business economy etc. Which is why a good budget is needed. But what is the mark of a good budget? How do you properly budget for your startup plans? Check out a few of the tips below.
Know What You Need for Opening Day
The day you open your doors to the public, and start accepting customers, needs to be a huge milestone in your startup budget. You need to make sure you’ve forked out for the costs that are going to be most pertinent on day one, and then you can work out a budget beyond this.
So you’re going to need to know the costs of renting the office or the shop you’re using, what the warehouse is going to cost you (if you need to use one), what the necessary furniture (such as rails and shelves and the sales counter) and equipment costs are going to add up to, and ultimately, you’re going to need to budget for set up fees and bringing in a professionals to work for you, such as an accountant and any other employees you’ll be needing to operate efficiently.
Know the Transaction Costs
You need customers to pay for your products or services, but you’re going to have to pay for the right, and equipment, to do so. So before you get your budget together, make sure you know the cost of a credit card machine at the very least.
You don’t want to be wasting your precious time and money with transaction options that don’t cater for every kind of customer that comes through your store. And whilst it might seem cheaper on your behalf to only accept cash as payment for the foreseeable future, it’s actually going to help turn away the bulk of customers that roam up and down the high street.
Know What Expenses are Fixed
If you’re going to be paying for rent and bills and utilities every month in your main operation location (excluding online sales), find out if these costs are going to be the same (or a similar) amount each payment. Once you know the bulk expense, you can better budget for the more variable costs on top of them.
Budgeting for a startup doesn’t have to be hard, as long as you know how to go about it properly, and remember that your budget is going to have to be flexible over the coming months.