Creating a budget and financial plan for your business is a daunting and difficult task, but it is a necessary step to regulate spending and ensure that you maintain long-term success. Your budget should be based on your profit estimates, cost and expense estimates, and current investments into your business thus far. If you are just opening your business, profit estimates can be especially hard to predict, so it is best to use a smaller, easily attainable target at first. As your business progresses, you can use past data on sales and costs to adjust this target more accurately.
To make your first budget or financial outline easier, here are some commonly overlooked items you should include in your cost or expense calculation!
At this point, hopefully you have already purchased your business location (or online website if you are a digital-only company) and any equipment required, such as laptops or technology for employees, desks and chairs, printers, and so on. After purchasing these essentials, it is then important to account for the costs of branded materials. Examples of branded materials include signage for your storefront, business cards, window decorations, clothing/uniforms, or any other items you plan to put your logo and/or business name on for marketing purposes. Designing the perfect sign for your business can be difficult, so researching some business sign ideas can be a great first step. Many branded materials like signs and window decorations are a one-time purchase (unless you rebrand your business later on), making them good investments for the future.
An often overlooked step is researching your target market, industry, and audience both before and after opening your business. Assessing your competition and learning what types of customers to target with your marketing, products, or services is crucial for making your business successful in the long term. Although research can set you ahead over time, it does require both upfront and ongoing costs. You can outsource your market research to a specialized company, or you can do your own research with an effective yet cheap marketing tool. Either way, including research costs in your budget upfront is a great way to increase your future success.
Required Software Subscriptions
Another frequently forgotten cost is required software subscriptions or purchases. For example, if your business needs Photoshop software for designing mock-ups or creating graphics, including the price of an Adobe Creative Cloud subscription is necessary for your budget. If your business needs marketing or sales software, buying access to HubSpot or a similar product is also necessary. Additionally, including the price of maintaining and hosting your business website is important to include as well.
Overall, there are many things that must be included in your budget when you first start your business. Budgeting early can set you up for long-term success, so making an accurate financial plan is very important. Hopefully, this list has helped to simplify the process and give you some ideas for other often-forgotten costs to include for your unique business!