Designing your first budget as a business owner takes lots of time and strategizing. You know the basics of budgeting from taking care of your personal finances, but your company’s expenses are much larger and more complicated. As you make your plan, don’t forget to address these areas.
You’ve set money aside to pay for your equipment, but have you prepared for when your machinery breaks down? Talk to companies that offer industrial maintenance Nashville TN and decide how much money to set aside for this purpose each month. While you probably won’t have machinery issues for the first few weeks, keep on saving; you’ll be glad you did when you have your first equipment malfunction.
Depending on what kind of business you run, you pay different taxes. For example, if you are self-employed, you must pay a 15.3% federal income tax on all your earnings. On the other hand, if you’re not the sole proprietor, other taxes apply. Throughout the year, leave room in your budget to pay these taxes so you’re not surprised in April.
It’s hard to forget about major purchases such as a mortgage or your rent bill. However, you might not remember that every building has utility bills just like your house does. Work with your electric and water companies to estimate how high you can expect your bills to be. Don’t forget to calculate the cost of heating, air conditioning, and Wi-Fi, too. Thankfully, unlike with maintenance, you know exactly how much to save for this area every month, as long as you stick to your projected resource use.
Creating your business’s budget for the first time takes a while, and it’s easy to forget critical expenses. Have a fellow business owner or one of your investors review your budget so you’re confident that it realistically represents your spending.