Creating A Budget For Your Startup Business
Updated: Apr 20, 2018
Every new business needs to have a start up budget. This should include the amount of money you need to actually start your business. Plus it should include an amount to help keep your business running at first.
So where do you get funding from?
Well there are several ways to do this. Depending upon how much money you require you may want to get a loan from friends or family. Or you may have personal funds that you can use. If you do use friends or family ensure that you have a written agreement with terms of pay back and interest, if applicable. This will prevent any problems from occurring in the future.
Other options for funding include asking for a small business loan. When you go this route you are normally required to have about 30% of the required amount yourself. Once approved you can receive up to 70% of the amount that you requested.
If you are planning for fast growth and are starting a larger business then you can look for investors and venture capitalists. To get this type of funding you are going to need to have a solid business plan in place.
Creating a good business plan is your first step in obtaining the required funding. There are many professionals that can help you create a good business plan and paying for this type of service may be worthwhile.
Once you have your business plan in place then you need to think about how to present your request to the financial officer. You need to conduct yourself in a professional manner and prepared to answer lots of questions. This means you need to know and understand all aspects of your proposed business. This includes growth plans and profit margins etc.
When calculating your start up budget you need to add in enough costs so that you can continue to live. This is really important if this business is going to be your only stream of income. Ideally calculate 3 to 6 months of living expenses into your total.
Your start up budget should include all costs to get your business up and running. This includes rent, buying supplies, paying wages, inventory and more.
You definitely don't want to rush asking for start up funds. Make sure your business plan is solid and that you have allowed for enough funds. Remember you only have one chance to present your business plan, and you want to make a good impression.