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How to Plan Your Start-Up Business Budget

How to Plan Your Start-Up Business Budget

As the economy continues to improve, more and more people are growing increasingly confident in starting up their own business. The internet provides a great platform for most businesses to start for relatively low expenditure; reducing the need for physical premises which can be very costly. While it does seem a hugely attractive proposition, there are still things the potential start-up needs to plan meticulously to ensure they don’t fall at the first hurdle. Failing to do so usually means the business will fail, when in fact a stricter hold on the planned finances may mean success.

Planning is Key to Success

At the face of it, starting a new business can be a daunting prospect. As well as planning the overall business model, you need to see if you have the capital to get the idea off the ground in its infancy. While the initial outlay for a business is often relatively straight forward for people to calculate as they intuitively understand that they will need to pay for rent, desks, computers and the like, the piece that people find more difficult to model and understand is their cash flow and working capital.

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In particular, holding and ordering stock can cause real issues. When stock has to be paid for (for new businesses generally on delivery), and in what quantities it has to be ordered often impacts an early stage business’s cash flow far more than the more easily understood items such as rent, salaries and the like. Obviously if you don’t have sufficient capital to fund the period between paying for your stock and receiving the cash from your sales of that stock, then you won’t be able to continue trading. So this is critical to understand and think about before starting a business. Also, if your customers pay later than they are supposed to and you have staff that are due to be paid, do you have the capital to cover this? These are all things that, although difficult, when planned properly are very manageable issues that your business can sustain.

Free Start-Up Business Budget Planning Tool

We’ve recently had a number of people on our Excel training courses trying to build financial models to understand how a business that they are looking at might work. Given that, we have created a simple model that can be used to map out all associated costs in the start-up of a new business.

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    This business plan template is designed to allow you to quickly and simply assess approximately how much capital you need to launch your start up idea. The sheet overleaf ‘Inputs’ asks you to answer a number of straight forward questions and will then automatically generate a set of financial forecasts for your business and estimate how much capital is will require. This is shown on the ‘Outputs’ sheet.

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      It’s been designed with web based businesses in mind but can easily be used for any small business. If you’re a physical retailer or a cafe your website development and advertising costs won’t be much but equally you’ll have physical fit out costs and ongoing marketing and promotion so just use those boxes for the equivalent for your business.

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      To use the tool, click the link below, make a copy and fill in your details. It’s that easy.

      Start up business plan template supplied by Acuity Training

      Please note: these forecasts are for illustrative purposes and should not be relied upon. This financial model is general in nature and you should take appropriate specific detailed professional advice before deciding to start a business. These forecasts should not be treated as a recommendation or endorsement of your business idea and Acuity Training Limited accepts no responsibility actual or implied.

      Featured photo credit: Business man/Kim Andre Ballovarre via flickr.com

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      Published on November 20, 2018

      The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

      The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

      The truth is, there are many “money saving guides” online, but most don’t cover the root issue for not saving.

      Once I’d discovered a few key factors that allowed me to save 10k in one year, I realized why most articles couldn’t help me. The problem is that even with the right strategies you can still fail to save money. You need to have the right systems in place and the right mindset.

      In this guide, I’ll cover the best ways to save money — practical yet powerful steps you can take to start saving more. It won’t be easy but with hard work, I’m confident you’ll be able to save more money–even if you’re an impulsive spender.

      Why Your Past Prevents You from Saving Money

      Are you constantly thinking about your financial mistakes?

      If so, these thoughts are holding you back from saving.

      I get it, you wish you could go back in time to avoid your financial downfalls. But dwelling over your past will only rob you from your future. Instead, reflect on your mistakes and ask yourself what lessons you can learn from them.

      It wasn’t easy for me to accept that I had accumulated thousands of dollars in credit card debt. Once I did, I started heading in the right direction. Embrace your past failures and use them as an opportunity to set new financial goals.

      For example, after accepting that you’re thousands of dollars in debt create a plan to be debt free in a year or two. This way when you’ll be at peace even when you get negative thoughts about your finances. Now you can focus more time on saving and less on your past financial mistakes.

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      How to Effortlessly Track Your Spending

      Stop manually tracking your spending.

      Leverage powerful analytic tools such as Personal Capital and these money management apps to do the work for you. This tool has worked for me and has kept me motivated to why I’m saving in the first place. Once you login to your Personal Capital dashboard, you’re able to view your net worth.

      When I’d first signed up with Personal Capital, I had a negative net worth, but this motivated me to save more. With this tool, you can also view your spending patterns, expenses, and how much money you’re saving.

      Use your net worth as your north star to saving more. Whenever you experience financial setbacks, view how far you’ve come along. Saving money is only half the battle, being consistent is the other half.

      The Truth on Why You Keep Failing

      Saving money isn’t sexy. If it was, wouldn’t everyone be doing it?

      Some people are natural savers, but most are impulsive spenders. Instead of denying that you’re an impulsive spender, embrace it.

      Don’t try to save 60 to 70% of your income if this means you’ll live a miserable life. Saving money isn’t a race but a marathon. You’re saving for retirement and for large purchases.

      If you’re currently having a hard time saving, start spending more money on nice things. This may sound counterintuitive but hear me out. Wouldn’t it be better to save $200 each month for 12 months instead of $500 for 3 months?

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      Most people run into trouble because they create budgets that set them up for failure. This system won’t work for those who are frugal, but chances are they don’t need help saving. This system is for those who can’t save money and need to be rewarded for their hard work.

      Only because you’re buying nice things doesn’t mean that you’ll save less. Here are some rules you should have in place:

      1. Save more than 50% of your available money (after expenses)
      2. Only buy nice things after saving
      3. Automate your savings with automatic bank transfers

      These are the same rules that helped me save thousands each year while buying the latest iPhone. Focus only on items that are important to you. Remember, you can afford anything but not everything.

      How to Foolproof Yourself out of Debt

      Personal finance is a game. On one end, you’re earning money; and on the to other, you’re saving. But what ends up counting in the end isn’t how much you earn but how much you save. Research shows that about 60% of Americans spend more than they save.[1]

      So how can you separate yourself from the 60%?

      By not accumulating more debt. This way you’ll have more money to save and avoid having more financial obligations. A great way to stop accumulating debt is using cash to pay for all your transactions.

      This will be challenging, depending on how reliant you are with your credit card, but it’s worth the effort. Not only will you stop accruing debt, but you’ll also be more conscious with what you buy.

      For example, you’ll think twice about purchasing a new $200 headphone despite having the cash to buy them. According to a poll conducted by The CreditCards.com, 5 out of 6 Americans are impulsive spenders.[2]

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      Telling yourself that you’ll have the discipline to not buy things won’t cut it. This is equal to having junk food in your fridge while trying to eat healthy–it’s only a matter of time before you slip. By using cash to make your purchases, you’ll spend less and save more.

      A Proven Formula to Skyrocket Your Savings

      Having proven systems in place to help you save more is important, but they’re not the best way to save money.

      You can search for dozens of ways to save money, but there’ll always be a limit. Instead of spending the majority of your effort saving, look for ways to increase your income. The truth is that once you have the right systems in place, saving is easy.

      What’s challenging is earning more money. There are many routes you can take to achieve this. For example, you can work long and hard at your current job to earn a raise. But there’s one problem–you’re depending on someone else to give you a raise.

      Your company will have to have the budget, and you’ll have to know how to toot your own horn to get this raise. This isn’t to say that earning a raise is impossible, but things are better when you’re in control right? That’s why building a side-hustle is the best way to increase your income.

      Think of your side-hustle as a part-time job doing something you enjoy. You can sell items on eBay for a profit, or design websites for small businesses. Building a side-hustle will be on the hardest things you’ll do, be too stubborn to quit.

      During the early stages, you won’t be making money and that’s okay. Since you already have a source of income, you won’t be dependent on your side-hustle to pay for your expenses. Depending on how much time you invest in your side-hustle, it can one day replace your current income.

      Whatever route you take, focus more on earning and save as much as possible. You have more control than you give yourself credit for.

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      Transform Yourself into a Saving Money Machine

      Saving money isn’t complicated but it’s one of the hardest things you’ll do.

      By learning from your mistakes and rewarding yourself after saving you’ll save more. What would you do with an extra $200 or $500 each month? To some, this is life-changing money that can improve the quality of their lives.

      The truth is saving money is an art. Save too much and you’ll quit, but save too little and you’ll pay for the consequences in the future. Saving money takes effort and having the right systems in place.

      Imagine if you’d started saving an extra $100 this next month? Or, saved $20K in one year? Although it’s hard to imagine, this can be your reality if you follow the principles covered in this guide.

      Take a moment to brainstorm which goals you’d be able to reach if you had extra money each month. Use these goals as motivation to help you stay on track on your journey to saving more. If I was able to save thousands of dollars with little guidance, imagine what you’ll be able to do.

      What are you waiting for? Go and start saving money, the sky is your limit.

      Featured photo credit: rawpixel via unsplash.com

      Reference

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