The importance of having a healthy startup budget

Asides from having a great idea, one of the most important things you need to do as a startup, is consider your budget. It’s important to have a clear understanding of what you can spend, what you can expect to make, and how the two balance out. Without undertaking this process, you risk ending up in a situation where your finances are out of sync, causing significant issues for your business.

Startup costs

Setting up a business requires investment. This is needed to cover a variety of administrative costs including setting up the company structure, paying professional service fees, putting up company capital, and of course, compiling all the documents that are needed during this process. You also need to invest in your staff; salaries, insurance, onboarding costs, and of course, the equipment they will need such as a PC and mobile. You should also consider the cost of buying or hiring a location to base yourself, as well as kitting it out so it’s fit for purpose.

Other costs to consider include licenses and permissions, marketing and website, advertising, software and IT, and utilities like water, internet, telephone, and electricity.

At this stage, it’s best to be liberal with your estimates. Remember, it’s better to have excess funds in your budget than not enough.

Consider your liabilities and lending


In the case of small businesses or family-owned companies, you need to factor in any current or future lending. Outgoings including the payment of loans or mortgages can impact what money you have available to invest, or cover basic costs. Similarly, you might decide to buy your company property via financing, in which case you need to have a clear idea of what your deposit and monthly repayments will look like. 

The best way to get this information is via the Trussle online mortgage calculator. Here you can input data such as deposit, term of the mortgage, and your current/projected income, to figure out how much it will cost you on a monthly basis. This also applies to loans you might take for financing your startup. You need to have clarity around how much interest you will pay, what the total monthly payment will be, and how long you will be paying it for.

Ongoing costs

But the costs don’t stop once you’re up and running. Rent, utilities, and things like insurance will have to be paid periodically as will staff salaries. Considerations such as pay rises, annual bonuses, and taking on more staff as you expand, also need to be factored in. You may wish to open new branches, move to a bigger office, or expand the warehouse. Your fleet of vehicles may need to get bigger to keep up with demand, or you may need to upgrade your production capacities. 

Again, being liberal with the estimations of the money you will need, is advised, so you can be sure you have all bases covered.

Startup costs, liabilities and loans, and ongoing costs are some of the main factors you need to consider when creating your business's budget. Of course, there are many more, but this provides a good starting point.