One of your goals for 2019 might be to start a business, or expand on one you already have. One of the very first steps to building or growing a business is to look at finances. A solid budget will get you started on the right foot for your business goals in 2019.
Building a business budget will be slightly different to creating a personal one, but it will follow the same main principles.
Add your income
If you already have a business up and running, your first step will be to add up all of your income. It is likely that your income will come from multiple different sources, so begin by collating it all.
Determine ongoing costs
If you are starting a business from scratch, you will need to begin at this step. Add up every ongoing cost you will have, from rent, to salaries, to buying products or equipment you will need. These ongoing costs will provide you with a starting point.
Determine other costs
Will you have one-off start up costs, or costs involved with expanding your business. This could mean prepaid rent or a bond, specific equipment, or new desks for additional staffing requirements. This section will often be the hardest to get right, as you will have unexpected costs, which brings us to the next step.
Build an emergency fund
An emergency fund is something everyone should have, but it particularly necessary in a business. You will always incur unexpected costs when building or operating a business. You might require a contractor, need to call a plumber, or have to replace a computer. Having some money set aside for these costs will come in very handy when you are in operation.
Add it all up
List all your incomings and outgoings and take a look at the numbers. These will give you an excellent indication of where you're sitting and if starting or expanding a business is viable for you in the new year. If it is not, don't worry! Is there a way you can increase your income or decrease your outgoing costs? Can you work from home to save on office space? Can you take on the work yourself until it is viable to hire an employee? Alternatively, you can set some savings goals for yourself this year, and work hard to meet them until you can build the business you want.