How to Create a Budget for a New Business

Starting up a new business requires careful budgeting. Whether you’re selling crafts from home or launching a tech start-up, financial planning plays an important role in the future success of your business. You’ll need to make estimates of your future expenses and revenues, while tracking your start-up capital and conducting research into your market. It may sound like a tall order, but don’t worry! With a bit of advance planning and the right tools to assist you, you can create a realistic budget for your new business. Here are a few tips to help you get started.

business accounting

Do your research first

Before you can create a realistic budget, you’ll first need to understand a little bit more about your chosen market. Learn more about the industry, competition, and future opportunities for growth. You can’t make a budget unless you can accurately predict what your expenses and revenues will look like, using comparable businesses as a guide. There are a number of ways to conduct market research, including evaluating products, consulting with experts, and surveying potential customers.

Estimate your start-up costs

Armed with the facts you’ve learned from your market research, you can then make a list of what your beginning costs will be. This will of course depend on the type of business you’re running, but could include everything from product design to website development. You should also take business activity into account. For example, if you’re planning to open a bakery, you could expect that mornings will be your busiest time period and will require you to pay more staff during this time.

Set up a spreadsheet

The easiest visual for a budget is a spreadsheet, which you can create with Excel, business accounting software, or even old-fashioned pencil and paper! If you need help with this part of the budget-creating process, it can be a good idea to take basic accounting courses at training.com.au or shell out for the right software. In your new spreadsheet, input fixed expenses such as rent, as well as variable expenses such as supplies and utilities. Don’t worry, these numbers don’t have to be exact if you’re just starting out. You can use your market research as a guide and adjust later. In addition to expenses, you can also insert a section for your expected income. Estimate at first, and then fill in these numbers with your real income at the end of each month or sales quarter. At this time, you can also analyse how and why the real numbers differed from the projected figures, which can be a big eye-opener.

Adjust budget as needed

Finally, remember that no budget is set in stone. All businesses experience setbacks or periods of slow sales activity, so be sure that you’ve budgeted for emergencies. Itemize your expenses so that you can cut the fat when needed to cope with these slower sales periods. This will help you stay afloat as you grow your new business.

Taking the time to create a budget before you even sell a single product helps you plan ahead and be more efficient with your business dealings. It can give you valuable insight into your industry, and help you devise strategies for financial emergencies so that you can avoid being blindsided.

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5 Simple Ways You Can Reduce Your Daily Expenses

Budgeting, saving, and paying off your debts can be difficult, but if your daily expenses are out of control, these things can become almost impossible. It’s important to make sure you’re doing all you can to control your spending and get the most out of your paycheque.

reduce daily expenses

To help you get started, we’ve assembled our top five ideas for reducing your day-to-day spend.

Keep a Spending Diary

Keeping a log of all your spending makes you conscious of every cent you part with. Keep a small notepad in your bag or somewhere handy to you and write down everything you spend money on from day to day. This is a great way to be more aware of your spending habits and it allows you to easily identify any bad habits and room for improvement.

Shop Online

Doing your shopping online can help you save money in a few ways. Firstly, online shops have far fewer overhead costs and are often able to offer better prices on many goods.

Secondly, shopping online can often reduce the temptation to impulse buy, especially when grocery shopping, as you’re not walking past shelves of enticing goodies to add to your basket. You can see everything online but the items you don’t need are far less appealing than in person.

Shopping online is also beneficial to your bank account in that you can see the totals before you reach the checkout, making it much easier to spend inside a budget. It’s also much easier to do price comparisons with everything on one screen, and many online shops have the option to sort items by price, making it easy to seek out the best deals.

Don’t Carry Cash

When you’re sticking to a budget it’s often the small costs that go unnoticed, but they add up. If you don’t carry cash with you it’s more difficult to spend on incidentals here and there. A lot of places actually have minimum spends for using EFTPOS too, so that candy bar or scratchie that you don’t really need becomes harder to get.

Combine Your Debt Repayments

Debt consolidation means taking out a new loan to repay your existing personal debts, thus replacing all your high-interest repayments with one monthly instalment, usually at a lower interest rate. This means a better deal for you and savings in the long run. Having only one repayment instead of several throughout the month will also mean less forgotten or late payments and, as a result, no more forking out for late fees. Ideally you’ll also be spending less on interest. Getting your debt in order will mean putting a dent in your daily expenses that will really add up over time.

Make sure you go through a reputable provider, for example, Fox Symes. A free phone call will provide you with some great information on Fox Symes debt consolidation options.

Haggle for a Deal

Call up service providers that cost you a fair bit of money, like your insurance company or Telco, and make sure you’re getting the best deal that they can give you. The best way to do this is to shop around for better prices, get cheaper quotes, then let your company know that you’ve found a better deal and ask what they can do to keep you, whether it’s by matching or beating the price or maybe offering you something like additional services or other perks.

Saving money doesn’t have to be a complex system of money-juggling. These are just five simple ways to save money on your day-to-day expenses, but don’t stop at five, there’s plenty more room for reducing your daily spend. Be creative, do your research, and never hesitate to ask for help.

Katie is a Personal Finance Writer from Brisbane, Australia. She says that combing your debts is a great way to save on your weekly loan repayments and recommends talking to the professionals at Fox Symes for more information.

Image Credit:
Stuart Miles – Free Digital Photos.Net

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