Setting up a new business can be equal parts excitement and worry. There is a big risk that all of your hard work will not pay off, and everything that you have pinned your hopes and dreams on will go down the pan. There is obviously the more optimistic viewpoint, that as long as you put the effort in, and are thorough with your planning, then you will hit the ground running and your business will be the success that you are hoping that it will be.
Having an amazing concept for a business that you have studied the market for is only part of the battle when it comes to getting your project out into the world. You will need to secure money to get your business moving, and unless you have enough laying around in your own bank account, you will probably need to take out a business loan with the bank, or go and pitch your idea to an investor. To secure funding from any external source you are going to need to have a strong set of financial forecasts and a spending budget that is comprehensive. This information is vital for backing up your business proposal, which will focus on the nuts and bolts of the business and how you will generate your income.
Investors are smart people and they will deal with proposals and budgets from lots of companies on a daily basis. They will be able to spot the flaws in your budget the second that they lay their eyes on it. For that reason, you need to ensure that what you are providing them will hold water and is a rock-solid investment prospect.
If the document does not look thought through then it may well indicate to the investor that you are not ready to run your own business and your proposal may be rejected.
Cover All Bases
Your start-up budget needs to have every single little detail imaginable on it. From all of your admin and recruitment costs, through to the rent and resin flooring that you choose to lay in your business premises.
While it is not crucial that you get your costings down to the exact penny, you should be able to provide enough information evidenced in quotes, that you will be able to carry out any setup work within any amount that has been set aside.
Plan For The Unplannable
There are going to be areas of your setup that go wrong somehow. Delays and problems with contractors can push work behind schedule, or sometimes things get uncovered along the way and need additional spending to cover these costs.
For this reason, you will need to create a contingency buffer within your budgeting costing that will allow for any unplanned spending in areas that could not have been considered. Try and set aside a considerable amount for this, as you would not like a business to fall through because of something that could not be foreseen.