The first years of any new business are always the toughest, and stretching your budget to the max is essential if you’re going to thrive. Today, we’ve assembled some top tips that will help you stretch your bottom line further, and foster development and growth within the company.
Tips to Create a Startup Budget
1) Network, Network, Network
Many businesses fail to use the startup-aimed resources in the business community around them. Maybe you feel your niche is too different, or maybe you simply aren’t very good with people. However, getting to know the other young business leaders around you can not only foster growing connections and potential collaborations, but will also help you get tips and tricks on operating smoothly from people in the same business waters as you, and can even get your name ‘out there’ to people looking for what you offer.
2) Check your Expectations
The first few years of any business are tight. It’s important to be realistic about what this means. Your budget should be spent on what generates income, not what looks good, image, and other non-necessities. Remember, many a multi-billion dollar company started in a garage! You don’t need designer furniture and flashy premises, you need to be building clients and income.
Be frugal when it comes to your expenditures. Frugality doesn’t have to mean skimping on quality; it can actually mean investing in high-quality products and services that will last, which means less expenses for the future.
3) Look for Business Resources
Business incubators offer you a chance to leverage established business people’s experience in building your business, without the dangers inherent in partnerships and other direct-stake investment. Many local governments also offer incentives, schemes, and other resources you can use to help you get off your feet.
4) Know Where Your Money Is Right Now
You cannot startup budget smartly if you don’t even know where your money is going. Track everything, and make sure you always know what your financial position may be. Even small expenditures need to be tracked, and you should always be mindful of the difference between your ‘on paper’ income, and what’s in the bank. Many startups run into liquidity issues, particularly while you’ve generated expenses on a client’s order but are still waiting for the incoming payment. If necessary, you may need to look at solutions like purchase order financing to help you through the gap.
5) Think Future-Forward
Always keep your eyes on the future, not just the now. When hiring new staff, don’t settle for the cheapest (or take family members and assume they can get the job done). You need to build a team that will stand the stress of time, and who are willing and focused on the growth of the business.
Only hire who you need. It may seem like a smart choice to build your full team from the beginning, but this can cause high labor costs, especially if you’re dealing with the turmoil of starting a new business. As you’re starting off, only fill the positions that are essential to progress.
6) Free is Good
There’s nothing wrong in smartly using free resources, support, and products that are open to you. Many startup budget are too focused on image, and not really living in reality. Businesses offer free products because they are hoping to entice you and they’re offering something they believe in. Saving cash where you can makes sense and being too proud to accept help simply does not.
7) Stay Balanced
Nice as the idea is, you can’t work at 100% every minute of the day. Burning out on your startup before you even reach its first birthday will achieve nothing. You need all the creativity and focus you can summon. Look after yourself, and pace your growth sensibly instead of mindlessly chasing around.
You need this same balanced attitude when making business decisions. You need to grow your client base, yes, but not at the expense of loyal existing clients. Make sure you’re under-promising and over-delivering, not the reverse. A cautious, sustained, and sensible growth plan is key to continued success.
Becoming an entrepreneur is not an easy road, but a sensible, measured approach to your budget and spending and a smart financial mindset will help you build towards your future goals.