Congratulations! You’ve made the decision to take on the adventure of being a business owner with the franchise that met your qualifications and helps you to share your passion. Like most franchisees, you will likely feel the excitement intertwined with the terror that you just spent your life savings on a business that isn’t yet supplying income. Of course, you will be working tirelessly to ensure your new business becomes the most successful, profitable business it can be. But, in the meantime, you may have to make a few temporary changes to accomodate the tight belt of a startup. Regardless of the financial situation you start off in and how much excess cash you have to begin with, you are sure to feel the squeeze of starting a new company. Don’t fret, it’s to be expected and it shouldn’t last forever. Here, we will give you a few tips to help you pinch pennies and live on a budget until your business begins, in the most literal sense, paying off.
You Have to Spend Money to Make Money
The old adage “you have to spend money to make money” is true, to a point. You can be sure that you will spend a significant amount of money to start your business, whether you build your own business from the ground up or you invest in a franchise, the startup costs add up quickly. If you were planning your investment wisely, you may have done some backward planning and forward thinking to ensure that you had the funds to support your new venture and support your family until your business could sustain you.
Set a Budget
Before you make your initial investment, make a realistic budget. You should have two budgets, one for your business expenses as well as one for your personal expenses. Your business expenses should include the location investment, the company start up fees (if you’ll have any), the costs related to hiring staff, as well as inventory and decor costs. Your personal budget should include all expenses that go out each month, no matter how insignificant they seem. Once you have it all written (or typed) out, it will make it easier to visualize how much you spend in a month and where you can afford to tighten up. This will help you to know what is coming in, going out, and what is on hand at all times.
Consider Due Dates and Timelines
It is ideal to create a due date calendar and keep track of when things need to be paid. In the beginning, take advantage of good days and weeks and use it as an opportunity to pay a bill early so that it does not become overdue. You wouldn’t want to put your company out of business before it has the opportunity to be profitable because of overdue bills. This is one area where you may need to pull from personal funds — funding the venture — to ensure that everything is paid in-full, on time.
Hold Off on Upgrades
When business starts doing well, don’t be tempted to use the influx of funds to immediately do upgrades. If you business is doing okay, settle with okay until you can level out your funds and recover your initial investment. Once you are solid in the increased income, then you can begin to think about upgrades that will directly improve sales. If the upgrades you want to make are purely cosmetic or comfort, hold off until your business has reached the point that bills are no concern. Be careful not to go “cheap” but refrain from purchasing the “biggest and the best.” One of the biggest financial mistakes a new business owner can make is to reinvest every penny back into the business before it has really taken off. Give it time, and keep business expenditures to the necessary.
Cut Down Personal Expenses
When you are a new business owner, it should be expected that your personal wallet is going to take a hit. The ideal scenario is if you can refrain from tapping into personal funds to make business payments. However, you should anticipate little funds to be coming into your personal account, initially. Do a review of your bills and expenses and reduce the ones that aren’t completely necessary. Avoid going out to eat and reduce luxury costs such as a housekeeper.
If you are like most new business owners, your funds will be tight initially. The good news is, if you scale back in expenses where you can and work hard to build your business, you can overcome setbacks and launch a successful business that will lead to an eventual lucrative income. If you are looking for a profitable franchise to invest in, consider Rebounderz franchise. Our success has been proven time and time again and we can almost guarantee that your days of frugal living will be short lived.