Creating a budget for your new business is a significant step in getting started. Your budget will determine how much start-up capital you will need. If you are seeking investment from external sources such as private investors, or the banks, you will need to have fully costed plans.
Missing vital information from your budget could cost you valuable funding. Investors can be very savvy when it comes to understanding what might be needed when it comes to starting a new business.
Budgeting for Your Technical Requirements
Technology plays a major part in many businesses. Whether you need to carry out administration, or you need to run a website and important software that helps you carry out your work, you will need to invest in the right equipment.
Get some quotes from a number of suppliers such as Interbyte and make a complete shopping list of everything that you will need. Make sure you include anything that will be critical in carrying out your role.
Then you will need to think about website setup costs including site hosting and the additional costs you will need in having the page designed, as well as the implementation of an SEO strategy.
Creating a Staffing Budget
One of your largest expenses will be your team. Paying a reasonable wage is important. If you pay your staff lower than they deserve, then they will become very demotivated.
You will also need to consider how many employees you will need in order to meet the demands of your workload. If you don’t have enough staff, you will all be overworked. Too many staff and you will be wasting money.
When factoring recruiting your team, you should also think about the cost of advertising the positions. If you need to hire a recruitment company, or a venue to hold interviews, this needs budgeting for.
Once your team is employed, before you start them working, they will all need inductions and training. This will cost you money and should be budgeting for.
You will also need to think about other expenses such as any contributions you will be making to pensions or healthcare schemes.
Keeping Room in Your Budget
Things do go wrong from time-to-time, and you might end up overspending, or needing something that you had not planned for. That is why it is important to overestimate all of your costs and to remember to include a contingency element within your budget.
The last thing that you will want is for your company to not be able to get off the ground because you have run out of money.
If you are seeking investment from an external source, having a budget that seems to match the objectives of your business and your initial revenue projections will go a long way in convincing your investors to put money in your business. Make mistakes in this area and they may not be so quick to support your business by investing in you.
