Tuesday, July 23, 2013

How to start a small business on a budget

So you've come up an idea, something that either consumers are demanding or are in need of. Kudos to you but where do you go from here? The following article provides you with a rough outline to help you wrap your head around what needs to be done next.


It all starts with a well thought-out business plan and budget. This is the key to growing a small business. Preparation, preparation and preparation. At first it may seem that’s all you’re doing. You need to remember that strong foundations lead to a strong business. You’ll need to be a reasoned planner, this may be your baby but you need to think clearly and logically.


You’ll need a marketing objective that is reasonable. There is nothing worse than a goal that is based on wishful thinking. It’s silly to think that you can get by without marketing. You are a new business. People don’t know who you are, what you do and why they should be investing their hard earned money into your business. Your marketing objective should be based on creating awareness but also needs to be broken into specific and measurable goals.


Allocation, where will your revenue be invested? It can’t all go into your pocket, your business needs constant investment to stay afloat. Some of the normal categories of running a small business include; liability insurance, telephone bill, office supplies, computer, employee pay etc. Some business may have storage facilities hired, Fort Knox Storage for example, that will also need to be paid for. As your business grows so will these expenses.


Set a salary for yourself. Do not simply take the remaining amount of money and transfer it to your personal bank account. Be smart, have a rainy day fund. This is also known as your retained earnings, it’s a god send in times of economic downfall.


You have a budget for a reason, stick to it! Business is not about “feel”. It’s about the numbers, they won’t lie to you. Intuition is based on experience and fact. Don’t confuse intuition with your emotions that never ends well.


It never hurts to have someone double check your work. Have a professional look over your business plan and budget with a fine toothed comb. A professional will insure that the quality of the business plan is at the corporate level it needs to be. Have the other person a) check the financial numbers, and b) check the business strategy to see if it's sensible. This is just old-fashioned common sense. This last tip really shouldn’t be a surprise.

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