Most know the importance of a budget before venturing into a new business enterprise.

But the problem is if you don’t have real experience running a business, or even if you feel you do, if you don’t have hands-on experience with the financial side of things in a business like the one you are about to enter, it is very easy to miss things.

A budget is a decision tool. It helps you decide –

• How much capital you need to get started
• How much working capital you will need to fund the business on an ongoing basis
• How much you can afford to pay your staff
• What your product or service pricing needs to be
• Your break-even point
• How long you can stay afloat if things aren’t working as well as you hope

So it is vital you cover every possible expense and outgoing and don’t miss a thing.

Because if you don’t get it right, then your decisions will be flawed before you even start.

Of course, we all know a budget is our best prediction of the future, so it rarely if ever will be 100% accurate. But you must do the best you can, and keep it conservative with room to move.

The most common expenses we see new business owners miss include –

• Variable Outgoings on your Business Premises
• Managing Agent Fees on your Business Premises Lease
• Full Award Wage Entitlements
• Payroll Tax
• Fringe Benefits Tax
• Workers Compensation Insurance
• Income Tax (especially in the second year of operation)

But the biggest one consistently missed is …

• Sufficient Advertising and Marketing to actually get customers or clients to your door!

More about Accounting & Tax