Budgeting Tips For Starting Businesses

October 25, 2015

Industry

Are you looking to start a business?  Starting a business can be extremely difficult but it is also one of the most rewarding experiences in the world.  Knowing that you created something from scratch and that you are your own boss is amazing.  One of the most asked questions when it comes to starting a business though is: “How do I budget?”  Here are some of the ways you can budget to start your own business.

Know What You Need (And What You Don’t)

When starting a business it can be tempting to say that you need every resource under the sun.  You need to sit down and do the research into exactly what you need.  Often times there are many things that you can acquire as you move along in the business world.  You don’t need to get them up front.

Before making any purchase or hiring someone, ask yourself “Do I need this to succeed?”  If the answer is yes than you should probably make the purchase.  If the answer is no, it can wait.  There are many professionals out there that can help you to determine what you need and what you don’t to get started.

Consider Using A Freelancer

Many people who venture into the business world look to big names who charge extra for services such as logo creation.  There are many freelancers out there that specialize in a variety of services and charge less.  This will allow you to have more of a budget for other parts of your business.

Websites such as Upwork and HireMyMom are great websites to help you connect with freelancers.  Some people even choose to use Craigslist to connect them with people to help them get their business started.

Plan Your Year Out

Many businesses have parts of the year where they do not do as many sales.  For example, many people stop buying luxury items before they start their Christmas shopping so that they can afford to buy people gifts.  Companies that aim to sell to schools will notice less business during the summer when most schools are out of session.

You should plan for these slow times of the year and have methods for either bringing in extra income or mitigating the costs of keeping your business open.

Work From Home or a Shared Office Space

If you can, consider working from home.  Not everyone has the option of working from home but if you do it will save you a lot of money.  You have to be careful working out of home because many municipalities, landlords, and communities define what can and can’t be done out of your house.  Some places also require you to get licensing and agreement from your neighbors.

Another option is to find a shared office space.  There are many companies out there that are dedicated to bringing people together with shared office spaces.  Not only do these shared places give you a place to work but they also allow you to connect with other professionals who could end up helping you move on in the business world.

Pay Off Your Debt Quickly

If you are starting a business from scratch, chances are that you have debt to pay off.  Instead of using your profits to expand right away you should pay off as much of your debt as possible.  Interest payments cost a lot of money and debt looms threateningly over your head.  Not only will paying off your debt be good for your business it will help to lift a weight off your shoulders.

Do Not Spend All Of Your Profits

A lot of people will be tempted to pay off all their debt or to expand or to upgrade right off the bat.  When this involves spending all of your profits though it is a bad idea.  You will want to save a good portion of your profits should you have unexpected expenses or should something happen, such as a slow month.  Make sure that you plan to save a good portion of your profits every month.

Budgeting for a business may seem daunting but it doesn’t have to be difficult.  If you sit down and write out all of your needs and your projected profits you will often find plenty of places where you can save money.  There are even some people who will provide consultations for free.  If you do the work to plan out your budget, it will reward you.

Get Updates Delivered to Your Inbox

Sign up for our newsletter