Startup Budget Planning Templates
Starting a new business is like a dream come true. Almost all of us think of some kind of business at one point or another but only a few have the courage, guts, and resources to actually see their dream become a reality. There is a saying that businesses run on ideas not money and it’s true to some extent but when we talk about the real-world, starting a new company costs money, lots and lots of money.
What is Startup Budget Planning Templates?
The fact that a new company doesn’t make a profit for at least 4-5 months at the beginning alone is a scary statement because you can put everything you have in your business and for 1st and 2nd months, everything seems to be going smooth and suddenly you realize that there is no money in company account to pay the employees and utility bills. In order to evaluate this and many other problems, it’s important to create a startup budget sheet. Not only that this sheet will tell you exactly how much money you need for the startup but it also estimates the profit your company will make each month in the starting and how many months it can survive without making any profit.
Key Elements of a Startup Budget:
- Equipment cost
- Registration and incorporation charges
- Office space renting expenses
- Inventory expenses
- Marketing and advertisement budget
- Website expenses
- Office supplies and furniture expenditure
- Office utility budget
- Payroll expenses
- Insurance expenses
- Taxes and other relevant expenses
Guidelines to Create Startup Budget Planning:
Set capital amount to start with:
The first and the most important element to start preparing the budget are to see how much money you have in your account. This number is very crucial because every expense depends on it. For each expense of the startup, you need to give a certain percentage of capital amounts i.e. 2% for marketing and advertisement, 5% for inventory, etc.
Make a target of your profit and sales:
Keep in mind that no matter how much capital amount you have, it’s going to run out if there is no income of the business. Smart business owners estimate the amount they can earn for each month of business in the first 2-3 years of the operations. These numbers help decide and set a budget for other expenses of the business. For instance, if you see that after 1 year, your sales figures increase by 5%, you can certainly increase the marketing and advertisement budget and can afford to hire a consultant as well.
Calculate operational expenses:
Running a business means making expenses and some of these expenses are made in advance before even receiving any profit on the sales. In order to ensure that you can keep your company running and you don’t end up in a situation where there is no other option than to file for bankruptcy, it’s important to estimate each and every expense of the business and note it down for evaluation and final calculation.
See how soon the company will make a profit:
It’s not uncommon for startups to not make any profit at the beginning of the operations. In fact, this is one of the most important factors that smart business owners consider before starting a new company. For small startups, it’s estimated that for the first 4-6 months, there is no profit while this duration is shorter for big corporations as they have bigger capital amounts to start with.
Ensure all expenses are included:
In the end, when the budget planning is completed, go through each step again to check if all expenses are included in the budget. Often some important expenses are missed or overlooked and there is no way to actually realize this until that specific expense is made. It’s better if you share your budget sheet with a consultant or an experienced business owner and ask them to check for improvements, errors, and mistakes.
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