Choosing to follow a personal dream and become self-employed can be an act of bravery and passion. It also involves tremendous risk. When taking that leap, one of the best fail-safes for your new business venture is to construct a budget to ensure your entrepreneurial endeavor survives.
Self-employment always has unforeseen costs. Your first step should be estimating your monthly and annual earnings and expenses. This will give you an idea of your operating costs and a starting point for your budget. It will also offer a monthly sales goal to keep you honest and focused.
Taxes are one of the most overlooked costs. You’re used to having a handy accounting department take care of that for you, but it’s worth your time to do your homework. Most experts suggest setting aside 30% of your income.
Another key item to keep in mind is savings. Not just short-term goals like vacations or a new car. What happens if you get sick? You’ll want to create an emergency fund. Likewise, budget your own retirement plan right from the start. Otherwise, you risk not having enough savings down the line.
As your business grows, your numbers will shift and adapt. Keep an eye on how much money you have coming in and how it compares to the money you have going out. It’s an easy trap to overspend or give yourself too big of a reward when you unravel new market opportunities. Instead, stick to short-term rewards to keep you motivated.
Setting Your Budget
Budgeting might seem like hard work, but the reward is creating a less-stressed, successful business. Looking to fund your business? Call Countybank at (864) 335-2400.