Three Mistakes New Businesses Make With Their Budget
There are a million big and little details and decisions to make when starting a business. Many of these big decisions come when planning a budget. Here are a few of the many things prospective business owners might overlook when founding their company.
No Budget Foundation
One of the first things a prospective business owner should do is set a budget. This is an integral part of the business plan: a company would have a hard time succeeding without an initial plan for expenditures. You can’t build a house without a foundation, just like you wouldn’t build a business without a plan for the budget. The easiest way to accomplish this goal is to talk to a qualified professional about the business’s goal.
Forget About Marketing
Although it’s possible to get your business off the ground without an official marketing plan, you probably will not get very far. And it’s not just a plan you need—depending on the type of marketing a business owner expects, he or she may not be able to accomplish their marketing goals without a marketing professional. Even if the business owner can manage the marketing on their own, a percentage of revenue should be filtered toward marketing; a lot of social media is free, but not all of it.
Not Knowing When The Business Breaks Even
When starting a business the focus is on the business plan, not necessarily on the cost of rent, utilities or office materials. By not considering these costs on the same level as others, a business owner may reach—or exceed—their breakeven point before the end of the month. Something as easy as keeping an Excel worksheet to sort out fixed and variable costs can make a world of difference.