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If you have an idea for a home business, what’s stopping you from putting it into action? Maybe it’s a lack of time? Maybe you’re not sure where you’d even start? Or maybe you’re worried about the financial aspect? The latter reason alone is one of the worst things that can hold a person back, but it doesn’t have to be as scary as you might imagine it to be.
Starting a home business of your own is a big step to take, but it doesn’t have to be an impossible one. First thing to do is to make a plan for all the financial turns your business might take well in advance and all the steps you need to take to actually setup everything you need for your business. Be sure to research every single expense that you need to include for the particular business you are starting when putting together a plan. A home business can run up a big debt if you allow it to (which I highly recommend TO NOT DO THIS). A plan can put this into perspective of whether or not your home business idea could be feasible or not. To prepare properly, you need a full step by step plan well ahead of launching your business.
Check out the ideas below here to help in the beginning stages of planning financially for your new business before ever starting up.
Keep an Eye on Equipment Costs
You have an office space in your home to work out of, but do you have the right equipment to staff it? You’ve got a computer, but do you have a phone or high speed internet line, printer, copy machine, binders, pens, plenty of data storage as well and more? You’re going to need a lot more office equipment than you might think; check out a list like this to make sure you haven’t forgotten even just a chair or lamp on your financial plan.
Pexels Image – CC0 LicenceHow much will it cost to legally be considered a business
You want to make sure you are safe from losing all of your personal assets when starting a business. If you do not have your business setup through your state government small business office, you might be putting yourself in jeopardy later in the life of your business. You might have opened yourself up to lawsuits that don’t just affect your business assets/money but also your personal assets and finances. Be sure to budget a consultation with a business lawyer to determine what you will need to keep your finances safe legally. You may also consider speaking someone in the Small Business Adminstration.
Watch Out for Hidden Fees
You’ve got a lot of upfront costs to deal with, yes, but there’s always going to be hidden fees to watch out for. The need to buy permits, potentially, or even the loss of inventory from time to time count as hidden fees. Account for them in your plan, just in case. Even when dealing with other businesses, in the hopes of achieving a good supplier relationship, can be a lot more expensive than you’d ever expect it to be.
Take outsourcing your supply chain needs to another country; it can be cheaper, but with the associated fees in sending money in another currency, you might not net the returns you were hoping for. It’s why you need a reliable way to Send money to India, for example, well in advance, and it’s a good idea to look into your account options now.
Always Keep Records
Finally, you’re going to want to keep a record of everything you spend and everything you make from even before day one. Keep every single receipt related to your business. You might have to spend a lot of money now to make even more money later on. That needs tracking to prevent you from spending out of your current means. Be sure to keep records of mileage for your automobile as this might also be able to be used as an expense for your business. Check with your accountant to determine what all you can include as expenses to run your business when filing taxes. This will also make filing taxes at the end of the year much, much easier! And be sure to keep paper copies as well, to make sure any digital storage doesn’t let you down.
Budget for professional help
This can mean lots of things. But before you ever even start your business you need to include estimated costs for professional help. Currently, I use a tax accountant and also a virtual assistant. While this can be a pretty penny, it is well worth it as I obviously have no idea for tax stuff and no idea to do a lot of the things my VA takes care of (mainly Pinterest). You might also need to see legal help from a lawyer and insurance for your business and potential employees. Be sure to include professional fees to your budget.
Utilities
If you are including a percentage of your home in your tax expenses, you will also need to keep track of utilities as a percentage of that can be attributed to your business. This needs to be included in your budget so you will understand how much is being contributed to your business. If you will need to rent office space or retail space, this can add up as well and needs to be researched well ahead of time.
Online Streamlining Services
I use a bunch of different streamlining services online with my blog. But you might have a completely different business that you are starting up. Currently, I use GoDaddy, Hootsuite, PicMonkey, Tailwind, Google Sheets, and more. For your business you might need something like Quickbooks, tshirt on demand websites, and more. On your budget just be sure to include monthly fees that your business will have to cover for this.
Starting a home business is going to be a big expense, but by creating an estimated budget you can have a better understanding of how much it will cost to run your business. This can also help to know how much revenue you will need to generate for break even or more importantly how much revenue you will make enough to pay yourself as an income to pay your personal bills. Your financial plan will could include all of these items and much more. Be sure to research every single expense that you need to include for the particular business you are starting when putting together a plan. Prepare before even putting a penny toward your potential home based business. You’re investing in your future, and that requires some lengthy legwork!
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Starting a business is going to be a big expense, but if you create an estimated budget you can have a better understanding of how much it will cost to run your business.
So true. It’s crazy how so many people will try to start a business without planning financially ahead of time!