Unfortunately, when it comes to startups, almost nine out of ten of them will fail. Not because the entrepreneur doesn’t have a good idea or a lack of passion. But rather, it’s usually because these companies run out of money. That is why startups must develop a solid budget plan from the start that can help them grow.
Things to Consider When Creating a Budget for Your Startup
Creating a budget for any business can be challenging. However, for a startup business that does not have any previous data to work with, the process can be overwhelming. As a result, when you are first starting this process, it may be a good idea to consider the following tips.
Determine Your Costs and Expenses
It is important to identify how your money is leaving your company so that you can budget for these expenses and figure out how they will impact your business going forward. Some costs to consider include the following:
- Business registration fees
- Raw materials
- Employee benefits
- Website hosting costs
- License and permits
- Accounting or bookkeeping needs
- Paid advertising
- Legal fees
- Server hosting fees
- Marketing fees
- Other costs
Estimate the Revenue Your Business Will Bring In
Next, you should come up with a rough estimate of the revenue you can expect your startup to earn. To find these figures, you should look into your sales, investments, loans, or other financial accounts where your monthly revenue will come from. Keep in mind that this estimate can be adjusted as you continue to grow.
Consider Other Factors That Can Hurt Your Business
As you create your budget, you will also want to consider variables that may impact your business that are out of your control, such as social platform algorithms that can hurt how your business performs or the economy.
Create a Short-Term Budget
Your first budget should be based on a shorter time frame. This will allow you to review your issues more frequently and adjust quickly. If you wait too long to go over your budget and address problems, the issues can escalate and cause massive headaches for the company.
Consider the Good and the Bad
Creating budgets based on different situations, including the good, the bad, and the ugly, can help your company prepare for the future, even when issues arise that you did not plan for.
Work With Experienced Professionals That Can Help You Get Ahead
At Ardent Guardian, our team provides startups with not only legal advice and guidance but with services that can help new businesses sort out their financial issues, tax preparation problems, and so much more.
In fact, because we are a licensed attorney, Certified Financial Planner, and CPA, we are a one-stop shop for all your startup needs, including:
- Tax preparation
- Legal counsel
- Contractual legal agreements
That is why, if you are looking for further information on how to make sure your startup is on the right track, contact Ardent Guardian today or call us at 703-592-6774 to speak with our team.