Creating a budget for your startup

One of the first things that any business should do is create a budget. It is important that you keep on top of your incomings and outgoings and have a good idea of what’s making you money and what isn’t.

Many businesses operate at a loss for the first couple of months, so you need to be prepared for this possibility when creating a budget. Often, the mistake people make is not preparing effectively for different possibilities, or they fail to think of something. 

You may want to speak to an accountant or invest in software. There are lots of software options, some of which are industry-specific, such as HOA accounting software. Do your research and follow these steps in creating a budget. 

Make a plan before you begin

Before you begin, make sure you have a business plan. Within your plan, there will be several things you need to consider that will cost you money. 

  • Location: You will need to decide on the location of your business, whether it be a hired office, space, a co-working facility, or warehouse. 
  • Assets: Any furniture, machinery, tools, computers, or computer software.
  • Supplies: You may need to stick up on plenty of supplies before you get started, such as office equipment or bricks. 
  • Advertising: How are you going to promote your business? Costs of promotional materials and advertisements on social media will all need to be factored in. You may also want to think about whether you will be running the online side of things such as advertising and a blog or whether you are going to hire someone else. 
  • Initial fees: Registering your business, your website, and any insurances or licenses. You may also need to speak to an accountant before you begin. 

Monthly expenses

Next, you need to think about your monthly costs. This list is not extensive, and here are a few that people often forget. 

  • Utilities
  • Rent
  • Transaction fees
  • Tax
  • Office supplies
  • Advertising
  • Subscriptions
  • Insurance
  • Wages
  • Loan repayment
  • Packaging and posting
  • Raw materials

Estimate sales

The aim of any business is to earn more than you spend. Have goals for sales for the first 3, 6, and 12 months. Set a best case, worst case, and most likely case scenario. 

Consider the fact that you may not receive payment for everything right away and that there may be some variable costs. 

Cashflow statement

Cashflow is simply the money going in and out of business. It is so important to keep a thorough record of everything. You could be aware of:

  • Monthly sales
  • Money collected
  • Fixed costs
  • Variable costs
  • Total profit

Many lenders will, as for three years of cash flow on a monthly basis. 


Setting up a business is an exciting and scary time. It is important that you are prepared, especially when it comes to software. Luckily, there are lots of tools to help you, and in many ways setting up a business is more successful than ever. Between accountancy software, social media, and Google-search, you have all the tools at your fingertips.