As an owner of one of the many California startups, you know just how much work it takes to set up a business. From legal paperwork to scouting out the ideal physical location, there’s a lot to be done! On top of all of the other must-dos as a business owner, it’s pertinent that you come up with a solid budget for your business.
Before your business can make money, you’ve got to know exactly how to spend it. Here are 5 useful tips to keep in mind when crunching numbers:
1. Estimate Average Revenue & Expenses
One of the first steps in creating a business budget is to determine what type of items you’ll need to buy, the cost of hiring employees, and the cost of everyday business expenses like rental fees and electricity.
With these numbers, estimate how much revenue you hope to bring in each month. This allows you to determine how much money you’ll be bringing in versus how much will be going out.
These numbers will be the basis for your business’s budget.
2. Automate Your Budget
Crunching numbers is no easy feat. To make creating a company budget less cumbersome and time-consuming, use software that can do most of the work for you. with the right budgeting software, all you have to do is enter numbers, and all of the hard math is left to the program to do!
Top budgeting software options include:
- FinancialForce Accounting
With the right budgeting program, you can keep track of your expenses in real-time.
3. Shop Around for Suppliers
When it comes time to hire contractors and suppliers, don’t settle for the first name you come across. You may be able to save a lot of money by shopping around and comparing prices and quotes. Consider options like bulk ordering that may be able to save you money in the long run.
4. Update Often
Once your business is live and bringing in revenue, take the time to update and readjust your budget. This will make the numbers much more realistic, making them a better basis for creating next year’s budget. Updating the numbers in real-time also allows you to see the bigger picture of revenue versus expenses. You’ll also have the information you need to shift and reallocate money as needed.
5. Save Money for Unexpected Expenses
As a business owner, you’ll need to be prepared for anything that comes your way. There will be all sorts of unexpected expenses that will occur over the years. During the startup phase, make sure you set money aside to pay for a seller’s permit and other must-have licenses like a wholesale license in California.
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