Start-up Budget 101: 5 Key Aspects of a New Start-up Budget

Before opening a new business, it is vital to prepare your budget. The budget will help you calculate your monthly operating expenses and give you an idea of how much money you’ll need each month. As a new business owner, you’ll need to have enough available funds in your account to cover at least the first 6 months of your operational costs. This gives your business time establish your customer base. 

Everyone who opens their first business has problems making a monthly budget. There are different expenses that you’ll need to pay each month. However, after you closely examine your budget, you’ll find that certain aspects of your business need a larger piece of the funds. Therefore, when calculating your new budget, it’s pertinent that you pay close attention to these five key areas of your budget.

  1. Rent – Each month paying rent is an essential budgetary concern especially if you need to occupy an office space in a prime location. However, before calculating your rent it’s best to calculate the percentage of your revenues for rent.
  2. Mobile Payment – If your business sells online, it's mandatory you provide your customers a mobile payment option. Therefore, you’ll need to have an ACH merchant service in place to accept mobile payments. Furthermore, this service needs a well-integrated point of sales system. Each month you’ll use a good portion of your budget to pay for mobile pay equipment, services or app development. However, you look at it; you’ll need to pay this expense monthly.
  3. Insurance – Business insurance is important for any start-up business. However, it’s not easy to determine how much insurance your company will need. Therefore, before purchasing any insurance you’ll need to consider the number of employees and if your employees will drive for your company. Furthermore, you need to estimate your projected earnings for the next three years. This will help you estimate how much insurance your company will need.
  4. Expansion – Every new business owner forgets to budget for growth and expansion of their business. Therefore, it’s necessary that you set a portion of your monthly budget aside for future growth and expansion. Afterwards, when your company grows, you’ll have the necessary funds available to meet these needs.
  5. Disaster Funds – Even though your company is covered by insurance, it still doesn’t mean that the insurance will cover all your major expenses when a disaster strikes. Therefore, each month you’ll need to set a portion of your budget aside to meet your needs. Estimate how much it will cost to move your location or order new inventory. 


Creating a monthly budget for a new business owner can be devastating. Many first-time business owners don’t understand how to budget for the unexpected or hidden expenses. Therefore, it’s vital to your existence that you pay close attention to these five critical areas of your budget. If you don’t have the necessary funds available to expand or your business or recover from a natural disaster, your business will fail.


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Awan Cheyanne

About Awan Cheyanne

Awan is a technical engineer, freelance blogger and hobbyist.