Posted by: Robin Gronsky | April 4, 2013

When Starting Your New Business, Double Your Time and Money Estimates

I love working with start-up business clients.  They are excited about opening up their new businesses and their enthusiasm is always fun to watch.

However, when I go over their plans (as part of their start-up package), I notice that usually their budget for expenses does not include many expenses that I know they will need to spend money on.

You will need to have cash in the bank to tide you over for at least the first 6 months of your first year in business.  Also assume that you need more money in your budget for expenses.  When I review a start-up budget, I frequently see no money for business insurance, bookkeeping or accountant fees, lawyer fees, and marketing costs.  In order to get your business started on the right foot, you need to pay certain professionals who will show you a roadmap to profitability.

In terms of timing, getting that first client can take much longer than you have planned.  So, expect that there will be no income coming in while expenses are mounting.  Do not panic.  It is an unusual business that opens its doors with a big client or a flood of customers.

It will take a few years of being in business to accurately budget your income and expenses.  Be somewhat conservative on the income and over-estimate your expenses and you should be in better shape to start your first year in business.

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