How easy is it to stick to a budget?

Question

I am opening my Business in a few weeks and i need to start thinking about a budget that i need to set myself for the first month so that i can see what i need to how much money i need to make to at least break even in the first couple of months. So how easy in the first couple of months to keep to a budget and not over spend?

Answer 1

It is almost impossible, or at least very difficult - the last thing you wanted to hear. Most startups fail, and that is often down to the business owner underestimating the level of financial control required.

The devil is in the detail. You have to monitor everything with a good accounting system, and make sure all your revenue streams and cost centers are analyzed in your accounts. For most startups, you can use low-cost, or even free, accounting software - you need to discuss this with your accountant.

You have to be prepared to take action when plans start going wrong. This happens if you are busier than planned, as well as if you cannot find enough business. Adjust your plans as soon as you see major departures from your budget.

Be flexible, and never spend money until you know it is safely in the bank.

Comments

This is a good answer as it now has put into perspective of what I need to run a business, this has also shown me how I need to keep on top of my finances and keep as close as i can to my budget