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Setting up a business from scratch takes hard work and careful planning. You may have a great concept that you know will be greatly popular once you get your company set up and running. However, if you cannot secure funding, or are unable to manage your budget correctly, your great idea may sink before it even gets the chance to try to swim.
If you are creating budgets and financial plans ahead of an attempt to secure funding for your business, there are a couple of points that you should consider. Firstly, do not sell yourself short, If you go in asking for less money on the assumption that they will only give you a certain amount and asking for more is pushing it, resist the urge.
Investors know how much business costs to start up, and if they are aware that they are the majority source of your start-up capital, not having enough money to get off the ground will sound alarm bells for them.
Secondly, investors know where many businesses fall down in terms of their budgeting and forecasting. They will know the types of things that they should be looking for that cause red flags when it comes to detailed planning. If you are not being thorough when it comes to putting together a proposal such as this, you are not going to be investable. Your idea may be solid, but unless they see that you have the business acumen to make a real success of it, then it may just remain a nice idea.
Create A Thorough Budget
One of the ways that you are going to be able to get a great budget together is if you list and find costings for every single little detail of your business. Start with your premises costs; your agent’s fees, deposits, rent payments, the cost of any refits such as having flooring laid by ImpactFloors.com. Think about your staffing costs and any recruitment spending that you will need to make such as hiring a firm to find your team.
You may need to buy stock in or raw materials. There may be equipment, furniture, racking, and computers that need to be bought. And then you will need to think about your admin and stationary costs, payrolling, and your social media marketing budget, website fees, and insurance costs. Allbusiness.com has some great tips for setting your business’s budget and getting it right the first time.
Create A Buffer
Problems do occur during the start-up phase, and you need to be prepared to deal with the unexpected. It can be hard to plan for this as these problems are the types of problems that you will not be able to predict. However, if you plan ahead and include a contingency for anything that may spring up along the way, then you will be able to deal with these with confidence. Think about setting aside a good five per cent at least for emergency spending.
This is a collaborative post.