My blog focuses on Financial Literacy/Money and Business/Entrepreneurship. It’s exciting to start a new small business, but there are many things to consider as well. The following contributed post is entitled, Three Financial Things to Consider When You’re Starting a New Small Business.
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If you’re in the process of starting a business then most likely this has been a dream that you’ve had for a really long time, but until you actually start taking the steps to get things started it’s impossible to know how things will pan out. Especially when it comes to your business finances, lets face it unless you’ve already worked as an accountant or you’re just really good with money then this will be all new to you. It’s not always the most exciting part to sit and think about when you just want to get your products, services or whatever it is you sell out there to the world! But if you do it now it can save a lot of stress later on when things (hopefully!) get busier.
Start up costs
When you sit down to work out the money you’ll need to spend then you will probably start by looking at the obvious things like equipment or any tools you need for the job. For example if you’re planning on running a coffee shop then the coffee machine along with the premises will likely be the most expensive bit. If you want to start a dropshipping business then it’s the stock and probably the storage/ fulfilment side of things where you’ll need to spend the most. But then you realise there’s fees for registering the business and getting insured and paying for the software you use every day. Your website, your branding and marketing and so many extra bits that do add up a lot. Write it all down and plan properly, it’s so important to go into things with your eyes open about what things will cost and how you can cover the costs if you’re going to be successful. You might need to look into business equipment financing or other loans depending on how you’re planning on going about paying for your startup costs.
Paying yourself
Your own income still matters even if you’re happy to put everything back into the business for now. You need to know how you’re covering your personal bills until the business is confident enough to take that on. Being straight with yourself about that early on gives you a clear idea of what needs to happen, not a hope that it might sort itself out at some point. Once you know this you’ll be aware of whether you can afford to go full time with your new business or if you need to earn some extra income for a while or rely on your savings.
Running costs
Finally there are more costs to think about too once everything is set up and you’re fully operational. Things like your bill costs for your premises and travel money are all examples. These will be needed when you do your tax return too since they can be tax deductible (and save you a few dollars). Your accountant will be able to help you out with what to track but make sure you do it early on, use an app or software to make it easier.
