As the new year rolls around, budgeting is on most freelancers mind.
A new year often means a rare chance to hit the reset button for many freelance businesses and creating a solid budget is a fantastic way to start.
While budgeting isn’t something that many freelancers enjoy doing, it’s an important aspect if you want to build a successful business.
FreshBooks has 5 great tips that will help you create an amazing budget to kickstart your new year.
“Tip #1: Do Your Research – Save for Hidden Costs
Virtually all businesses specialize in something; this is especially true of small businesses. They often don’t have as many resources, making clear focus a necessary requirement. You should know your specialty inside and out.
You also need to know about any potential competition, insurance, legal standards, tax codes, employee turnover, and regulatory costs; all of these (and more) fall into the hidden costs category.
According to the Small Business Administration (SBA), about half of businesses will not survive their first 5 years, and this is due to a multitude of reasons, but one very prominent one is due to a lack of sufficient funds. To be prepared for any hidden costs which may hinder your business, set aside at least 20% of your budget or revenue at the outset to cover the costs of things you may not have thought about.
Unless you have done your homework, are properly prepared and have allocated the money ahead of time in your budget, the hidden costs of running a business can sneak up on you and throw your entire plan off balance, even worse, risk closing your business’s doors.”
Check out the full post at FreshBooks.