Staying on budget when starting your business
(NC) Like renovating a house, it's easy for new business owners to exceed their start-up budget in the excitement of the launch.
“Your new business needs time and money to find its feet, yet it's incredibly easy for start-ups to go over budget,” says David Wilton, the director of small business at Scotiabank. “It's vital to scrutinize every expense, particularly categories known to consume the most money, such as the cost of retail space, as well as staffing and advertising needs. Crafting a plan that focuses on key areas of your business will help you analyze exactly what you need to succeed and stop you from overspending on any one aspect.”
For more guidance, Wilton offers some tips in a few key categories:
Commercial Space: Purchasing commercial space can be very expensive yet sometimes unnecessary or premature. Consider the type of space your new business needs. Can you sell your products or services through a website instead of a storefront? Can you negotiate kiosk space with a complementary retailer? Is there room at home to set up working space rather than renting, staffing and equipping a formal office?
Employees: Paying people is a huge financial commitment and usually represents the biggest cost to a company. You may be able to get the services and talents you need from a third party supplier, instead. For example, you could acquire the graphic design services you seek from a qualified design firm as an alternative to directly hiring an individual. Explore ways to get the work done using virtual assistants, freelancers, contract workers, vendors and temporary agencies.
Advertising: Business promotion doesn't need to be expensive to be effective. Creativity can help define your brand while generating buzz for your start up. Social media is a great tool for creating awareness about your business as well as networking with suppliers, consumers and potential business partners. Also, don't be afraid to leverage your network as it can be a great vehicle for introducing your business to potential clients.
“Starting and running a business is all about vision and perseverance, and having a business plan will prevent you from overspending in those early stages,” adds Wilton. “Your budget should include capital expenditures, fixtures and equipment, as well as your operating expenses, such as payroll, advertising and rent. When the budget is completed, it's always a good idea to add at least a 10 percent overrun in your projections.”
Interactive online tools are available for budget planning. Take a look at the Scotia Plan Writer for business at getgrowingforbusiness.com. This free service will help you focus on the fundamental aspects of your business, says Wilton, and put you in the best position to launch and grow your dream.
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