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Business startups and businesses which need startup budgets
Starting a business or a franchise can cost you a lot of money. To make sure that you have enough money to pay your expenses, you can use this budget template to track your startup costs.
Many small businesses fail because they fail to plan for startup expenses. If you want to avoid the same fate, try creating a startup business plan template. Here are some types of businesses that might benefit from one:
Starting a restaurant can be extremely expensive because opening one takes specialized facilities and equipment. Whether you’re purchasing or leasing everything, use the budget template to create a budget for your restaurant.
As for your startup costs, you should include how much you need for facilities, equipment, menu development, supplier sourcing, staff sourcing, cleaning costs, and anything else related to the restaurant.
The great thing about this type of business is that you can skip certain expenses. These include coffee, internet, and essential home goods. Still, you should create a startup budget template so you don’t overspend.
Businesses within this type are very inexpensive when compared to other businesses. To save money, use simpler templates to include the few expenses like SEO, advanced hosting services, etc.
You may find it necessary to create your own startup budget template because not all information provided by a franchisor is included in the franchise agreement.
Start Up Cost Templates
Tips for creating your startup budget
If you plan to open a new business, one of the first things you have to do is create a startup budget template. It is important so you can see the expected expenses and income of your budget and its cash needs.
When you start a business, you’ll need to set a budget for it. To do that, you can either consult with experts or research to find information about estimates.
Before you begin, think about the reasoning behind creating this budget. In this case it’s for your startup business. Then create your startup business plan template Excel document. Below are some tips to help you:
Plan the first day of your business startup
- The first step in creating an operating budget is to estimate the income you will generate during the first three months of operation. The money spent on renting a location where you can start your business.
Estimate the variable and fixed expenses for each month
- Gather information regarding your business that you know you will spend no matter how successful or unsuccessful it is.
- Then include the variable expenses on your startup budget template. These refer to the expenses which may change or fluctuate based on the performance of your business.
Estimate the sales each month
- To make it easier, you can use sales projections to predict your business’s sales. That is based on the most optimistic estimate of your business’s sales for the first year. The best case scenario wherein your business is wildly successful. So if you have a lender, you must show you have a reasonable chance of being able to pay off any loan.
- When you make changes to your sales figures using these scenarios, your cash balance will reflect that. You can then see how much cash is necessary for working capital, and how much you need to borrow.
- You probably won’t sell everything. So, estimate your expected collections rate and multiply that by your monthly sales.
Create your cash flow statement
- To do this, add the total sales for each month, add the total collection amounts for each month, and add the total costs for each month.
Business Start Up Costs
Using your startup budget
The key to creating a well-made startup cost template is to look at the details. To do this, you need to do a lot of detailed research by searching online, calling providers and suppliers, and making a list of all the estimates.
Startup budget templates are available to help guide you. Here are some tips about how to use them:
Budget for your company by listing the funding sources that are available to you. This includes any money supplied by investors and owners, funds available from various lines of credit, and capital equipment that may be used as collateral for a loan.
After you have completed all of your other startup figures, you can move onto calculating any potential fixed business costs. These are one-time costs associated with getting your business up and running. These include purchasing assets, warehousing inventory, leasing space, etc.
A startup’s fixed expenses are divided into two categories. Working Capital is the amount you’ll need to cover your ongoing business expenses and Reserve for Contingencies is a safety net to protect you from unexpected financial burdens and risks.
Monthly costs until your business become profitable
Seed money is not enough to start a business because you need operating costs. It takes months to get profits, so estimate the expenses and see how many months it will take.
Ready, set, go!
To perform calculations, you must input all of the required information into your startup budget template and get the total costs. This will give you a total surplus or deficit in funding.
If you have a deficit, think of ways to reduce your operating costs or find new sources of funding. If you have a surplus and your calculations are accurate, then your business is ready to be launched.
Keep things in check
Most of the times, new business owners end up spending more than what they had planned. You can avoid this by creating a budget and using the template as a reference to make sure that you don’t overspend along the way.