Say you stumbled upon a considerable sum of money. Perhaps you got it through an income-generating venture with friends, or you sold something of value, or your parents apportioned some of their retirement funds for you. If the said sum is a significant amount, you might get hyped with the idea of starting your own business and gain income for the long haul, especially if you wish to make the money roll.
That action is very inspiring and actually a responsible move because you will be investing your money instead of simply just spending it without possible returns in the future. Sometimes though, bumping into a lump sum is not always a possibility, and so bank loans may be an option to get the amount you need to create your start-up.
However, some people do not easily qualify for bank loans and so another option you may want to consider is a personal loan online. These loans are multi-purpose with low-interest options and with reasonable payment terms.
Now, you finally have the money for a business venture, but what most people overlook when starting a business is perhaps budgeting. Budgeting may appear a real hassle to entrepreneurs, especially those just starting out. However, it is a very crucial step in starting or running your business. Here are some budgeting tips that every entrepreneur has to keep in mind in order to keep the enterprise running, afloat, and profitable.
- Personal versus business financesThis tip cannot be stressed hard enough. Your personal finances should not mix with your business finances. The business makes irregular income since there is no fixed amount that will be generated daily. This tip is perhaps the most crucial of them all, so make sure to keep separate bank accounts for both.
If you mix them in one single account, it will be very difficult to identify your business’ costs and income accurately. It will also be hard to project future profits and income. By separating your personal finances and business finances, you can deal with the irregularity of the income, and it will save you from all the unnecessary stress brought about by mix-ups in accounting and even in doing your taxes.
- Money for taxesMake sure that part of your budget goes to taxes. Taxes are a regular expense and should not be overlooked when setting aside cash for your various expenses. However, this is a common mistake committed by business owners, particularly those who are just starting in the entrepreneurial world.
If you miss out on your taxes by not planning it ahead or missing it out because you have not prepared financially for it, you might end up paying more due to penalties and other late fees. Taking note of the deadlines for different tax dues is also equally important.
- Excellent record-keepingIt is very important to take note of what comes in and what comes out of the business. Maintain excellent record-keeping by taking note of all expenses no matter how big or small. Keep the receipts of your expenses as well as daily records of your income. Be as meticulous as you can to understand further your business budget.
- Minimizing expenses and being smartIt is necessary to minimize business expenses, especially when just starting out your business. If there are expenses like for décor, equipment, or non-essentials that you can do away without at least initially, then be smart and choose the most important expenses first. Moreover, this might need the money that you do not have in the first place and may throw your budget off.Being smart in terms of expenses may also manifest in how you deal with suppliers. If there are expenses that are not entirely fixed, which means a haggle is an option, then don’t be afraid to haggle with your suppliers to get the best deal. As an entrepreneur, go for supply expenses where you can possibly save money like purchasing supplies in bulk or getting discounts through rebates or early payments.
It is also smart to look around for options when deciding on suppliers. There might be a good deal somewhere, but you did not find it because you stopped immediately after looking at a few options.
- The unexpectedThere are times that an emergency might hit you or the business, and that is why budgeting and planning are very crucial things an entrepreneur must do. When you practice proper budgeting, you can brace for the impact of these unexpected costs and will help you deal with the consequences without negatively affecting the business.
- Considerations before full-time employeesIf there are tasks for your business that can be done by freelancers or contractors before full-time employees, then this might be a good way to kick start your company. However, if your business delivers services, include a short period of hiring and training before considering the staff as regulars. Just make sure you are practicing ethical and legal standards when doing so.
Giving your business leeway for training and hiring, this will save you money and sanity. A period allocated for evaluation of future regular employees is a smart option to ensure that you are hiring well-trained and capable employees who will serve as banner-bearers for your company and may either make or break the business.
- Research and ask for helpContinuing learning is invaluable. Do not simply chill or be complacent just because the business has been running smoothly. Unlearning, learning, and re-learning are equally important, whether you are new in the business world or have been an entrepreneur for a while.
Consider also asking for help from professionals mentors that may have the answers to your business woes. Having them help and support you especially in the fields that you might experience difficulty with such as accounting or taxes, suppliers, training for employees, among others. Do not feel bad for asking help from time to time. But do not take advantage of them either.
There will always be challenges that you will face as an entrepreneur. It is okay to feel overwhelmed at times, especially when you are just starting out your business. Whether the problem is your start-up capital or budget, taxes, employees, or other expenses, what is important is how you deal with the challenges when they come your way.
Lidia Staron is a part of the Content and Marketing team at OpenLoans.com. She contributes articles about the role of finance in the strategic-planning process.