When you are first starting your business, you need to have a budget. You have to be aware of the money that you have available for each purchase. If you have a freelance business, that budget does not have to be as in depth as the one for an office containing several people. Here are some guidelines for budgeting your new business.
- Demand is important:Before you start investing your hard-earned money in your business, make sure that there is demand for your services. Perform thorough market research. Roll over every rock, search every trade publication to make sure that people are wanting what you have to offer. Know if your business is trending upward.
- Look big:You want to show professionalism in your activities. Do not give your customers the impression that you are doing all of the work from your kitchen table. Give your customers professional invoices and have letterhead available. This makes you look larger than you are. Budget for the supplies which will make the greatest impression on your customers.
- Creativity rocks:You shouldn’t be stuck in the same old ways of doing things. If you find something that works for you, but has never been tried, give it a shot. Use your creativity to your advantage when you are designing your budget. You might find places where you can combine efforts and save money.
- Build from the bottom:Give yourself the minimum in administrative equipment. Ask yourself if you need a pallet of paper in the office, or whether a few reams would work. Your new business will be changing, and as such, your supplies will be changing. Don’t skimp on the things that you know that you’ll need, but everything else is negotiable.
- Be passionate about the business:The passion that you demonstrate about your business is contagious. It will infect your customers, enticing them to your doorstep. If you’re passionate about the business, you are more prone to use everything you have at your disposal to make it work properly.
- Budget for professionals:Not all of your expenses are in goods and services. You will need the expertise of your accountant. You will also need the expertise of a lawyer. You want to budget for at least one consultation with an accountant who has experience with new businesses. Build that necessity into the framework of your budget.
- Let customers do your advertising:Your new business needs to have an advertising budget, but it does not need to be gigantic. Let your customers provide you with potent word of mouth advertising. Offer them referral discounts and other incentives to talk about your business at every available opportunity. This will trim the need for lots of advertising when you are starting.
- Choose a business with low start-up costs:Some businesses require that you invest a lot of money in equipment. Others, like consulting services, require that you use your brain. If you’re working on a tight budget, choose a business which does not require that much money to start. You can always develop your capital in that business, then return to the high end startup.
- Use cash:Cash is king. When you use cash for your purchases, you do not have to worry about how you are going to pay for them. You do not have to contend with interest rates. You have one less payment, meaning that your accounting is that much cleaner. Use your debit card or cash for every transaction. Encourage your customers to use cash.
- Leverage your money:If you have to use a credit card, open a new credit card for your business. Get the 0% for 6 months introductory rate. Pay off the card before the rate goes up to the normal rate. You might also search for another 0% introductory card if you are still running a balance after the introductory period.
Use your common sense. You don’t know exactly what supplies that you will need for your business. Encourage your customers to use cash or debit cards for their purchases. Keep your start-up costs low by opening a consultancy rather than a huge production facility. Start from minimal levels of funding, and grow from there.
This guest post is from James Adams, a writer who for a specialist in office furniture called Office Kitten based in the UK.