|Money can go so fast, you might not even realize you have used it all up. Therefore, budget!
Picture by Stevepb
I am dead serious!
When you are going to startup, you will need a startup budget. There are many templates out there but the one I use is these budgettemplates, which I have modified myself.
This is a version I used for my first online store. The numbers are fictional but I tried to make them a little realistic.
This budget is not only for when you startup a company. This is also, for when you need to start a new project, even in your private life.
- For example when remodeling your old house or when buying a new one.
This ways you will get a good overview of the money going out of the company or your pocket. It is very easy to use, you just have to plot in your numbers, and it will total it all for you.
If you do add a new line, make sure to add it in the calculation otherwise, you will get a wrong total.
Importance of budgeting
It is very important to use a budget. If you don’t you, will probably go over budget and not have any idea of how you used all that money at once.
It is also a guideline for you, to make sure that you have the money, before you start using them on other things.
Never use money you don’t have. Unpredictable things happen all the time, like …
- You had to buy something expensive
- You bought too much on credit and don’t have money to pay
- You might have a break-in
- Or something else unpredictable
Maybe you have heard many entrepreneurs say that you should always multiply your budget with a number of times. Some say three, others five, some even ten.
I think this is a very hard thing to specify since it depends on the type, size, etc. of your company and how cost effective you are.
I think multiplying first year’s budget with five to seven and then later years with two to three gives a good overview.
Again, it does depend on how many expenses are connected to your type of company.
After doing a startup budget, you should do an operating budget for the first three years. It will give you a goal and an overview of the company. Read more about it why and how on X2Writers blog.
P.S. Want to get to know me personally? Follow me on Instagram @HafsaFarooqX2
P.P.S. Here is the link to my budget templates. Get to it, now!
No strings attached!