Monday, May 15, 2017
When you launch your own business, every decision feels like it could make or break your company, and you’re not entirely wrong; your actions can either set you up for growth or failure. As your business grows and changes, you’ll likely face hidden costs, have to come up with funds to hire more staff, and potentially need to upgrade technology– the list goes on. While it seems intimidating at first, you can find peace of mind in the future success of your business if you have a realistic financial plan in place. Consider these four things as you lay the foundation of that plan down.
Where will the money come from?
Before you start deciding how many new team members you should hire or what kind of services to add to your lineup, you need to know how much these changes will cost and where the money will come from. Are you going to use your business profits to expand? Will you need to get a loan? Nail down a number from the beginning and start setting funds aside to avoid major budget cuts later on.
How realistic are your goals?
A financial plan is key to helping you reach your goals, but even the best plan won't work if your goals are not realistic. Start with small, short-term goals and detail the exact process and resources you’ll need to get you there. You may find your initial goals to be too ambitious, so continuously reevaluate and scale back if you need to.
How flexible is your budget?
Many small business owners make the mistake of stretching their budget to the max, or failing to account for potential budget changes such as outsourcing costs, recurring legal costs, or a fluctuating market. A workable budget is one that accounts for every realistic contingency, expects growth at a reasonable rate, and leaves room for human error.
Do you have the right help?
Hiring a professional to help you create a workable financial plan may seem like an extra expense now, but it is an investment that will help you budget and plan more efficiently to save you money in the long run.