While running any business, unexpected expenses pop up. But the more expenses you have planned for, the more creative ways you can find of working them out.
Maybe you need a website, but can’t build it yourself, and you, an accountant, meet a web designer who needs his or her bookkeeping updated, why then, you can trade. But if you weren’t aware that you would want a website, then you wouldn’t have budgeted for one and might not have realized that you couldn’t afford one.
Careful budgeting of money coming in and money going out at the beginning allows you to see if you are meeting your goals. You may need to adjust your numbers as you go along. Maybe you discover you aren’t charging enough per hour, or maybe you as a coach discover that you are great at team building exercises and have companies lined up to do team building with you, so you have excess money in your budget and want to invest it back in your business, but where?
Areas to include in your budget:
• Start-up costs – these include any trademark fees for registering your company’s name, office purchases such as a new computer, and any other equipment you may need
• Marketing costs – these should be larger perhaps at the beginning, but marketing costs are ongoing
• Space costs – where is your office going? Do you need to pay rent?
• Supplies cost – all those pens, pencils, reams of paper and cartridges of ink add up quickly. At the beginning, don’t forget paperclips, stapler, staples, tape and notepads
• Employees: will you hire a consultant? Or maybe a part time clerk or assistant to file or help you put together packages?
• Your own salary: you still need to pay yourself, because how else are you going to eat? Many people, when they start a business, forget to budget a salary for themselves, and thus can find themselves still working for nothing in a year. Plan for success.
• Pricing – how much are you going to charge for your services can be determined by finding out how much other coaches or consultants charge for their services. Make sure that while your prices are competitive, they also cover your expenses, based on the number of billable hours you would work and remembering the number of unbillable hours you will end up working on the side.
• Upgrades – set aside money each month for computer or equipment upgrades or repair, and prevent painful huge purchases when things break down.
• Loan repayments – if you took out a small business loan from the bank, what are the repayment terms? When do you start paying it back, and how much at a time?
A budget can be the least fun part of opening a business. It’s not fun to watch the amount of money you set aside or scrounged together for this venture dwindle, and realize how hard you’re going to have to work to bring that sum back up.