Budget continues to be a prime impediment for those novice entrepreneurs who start a business with a whole lot of excitement but are not aware of the tiny details that can impact their business to a significant extent. Budgeting is one of those key tools that don’t only keep your business in track but also help one to save and invest in the most efficient manner. Even though entrepreneurs often overlook this evil, budget is something in doing which one needs to be smart.
While one can barely point out cons of it, the pros are numberless. For example, the saved money gone into the right trajectory can help the business to grow as money always brings sweet fruits when invested in the right place.
1. Keeping The Personal And Business Separate
As many would agree, lot of entrepreneurs end up mixing up the personal and business finance and that is where all the problem lies. When you start a business that is small in volume, keeping personal and business finance separate will help you to save yourself from embarrassments that will otherwise occur. The biggest benefit of this is that you can actually track the amount of money that your company is bringing in. Making a separate budget and keeping the credits cards separate for business and personal can result to be fruitful.
2. Keep Some Money Aside
Now, another big lesson is to save money from your profit for future. Many of the budding entrepreneurs are observed to put all their profit into new investments which might not turn out to be that great. On the other hand, you need to remember that there are some fixed costs that occur from your business and then there are recurring costs too.
Experts recommend that you should put 20% of your gross revenue aside in order to meet the needs occurring from taxes and recurring costs.
3. Don’t Throw The Receipts Away
If you just started out as an entrepreneur and you are just keeping an account of the largest expenses, you are doing a mistake. Rather what you should be doing is keeping a meticulous account of the small costs because small costs bundled over time can make a impact bigger than you can imagine.
4. Lower Your Costs
The first time entrepreneur has to try to lower his or her costs as much as possible. Whether it is the supplier or whether it is new business card that you just ordered online, you have to be cautious about the amount you are spending. In this era of new technology, the market is literally crowded with competitors and you can stay ahead of them only if you are careful about yours costs.
For example, if your competitor saves a few hundred bucks while ordering business cards online, just add the savings that he is making every time. If it goes on like that, you will be way out of the league even before you realize it. Cutting costs at the supplier level is the first thing that you should probably start with.
5. Stay Hungry
Staying hungry is an important quality for an entrepreneur. If you are too much satisfied with the deal that you have just made, you are losing out. It is recommended that you always go and investigate 3 or 4 options before closing any deal.
6. Expect The Unexpected
They say, ‘What can go wrong, will go wrong.’ Well, business has risk in its vein and you should be ready to tackle it when it appears.
If your business is not going that well, you need to be careful about the expenses that you make. If you have a vision regarding the possibility of something going wrong, you need to be take necessary action way ahead of time so that you can cope up with the situation when it takes place.
7. Go For Freelancers Than Full-time Employees
Since starting up business requires a lot of things to be done at the beginning, you should go for hiring a qualified freelancer or contractor rather than a full-time employee.
By availing full time employees, you don’t only pay wages but also pay other fixed costs that occur from workplace.
By outsourcing work or getting it done by freelancer, you save thousands of dollars in year that would otherwise occur from sourcing, hiring, training, payroll fees, taxes and many more.
8. Buy Used Appliances And Furniture
Buying decent quality used appliances or furniture’s never makes you look cheap. Shopping smart is the key to success in entrepreneurship. The money that you save from this can go toward buying a state-of-the-art equipment that you really need in order to deliver the top quality services to your clients.
7. Use Budgeting Software
Since budget has already proved itself a key element of success of your
business, you should probably start using budgeting software’s that are available online, easy to use and free as well. You can always keep an eye on them while you are out for shopping, Research says that having a budget with you keeps you more conscious and actually prevents you from buying stuffs that are not really required.
8. Start With Office At Home
Unless you really need a fancy office to start with, you could probably start working from your home. Many of the reputed entrepreneurs started their business at garage and they became successful. By eliminating all the costs that could occur from renting, furniture’s, decoration, so on and so forth, you can literally save thousands of bucks every month for a better equipment or a tool that you really need in order to provide a better service.
9. Hiring Full-time Employees
If you are planning to hire full-time employees, you should be looking at the entire scenario starting from the training material to additional needs to federal and state taxes to insurance and lot more. Since employing a full-time employee can make up 30% of a full-time worker’s salary, you need to ask yourself if you really need that. And, if you really need that, you need to calculate that meticulously.