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Simple Start Up Budget Template for the Self-Employed

Ready to start getting your financial ducks in a row and work out exactly what it takes to go self-employed and free yourself from your 9-5? Then you need to read this guide, bookmark it and come back when you’re ready to work on what it takes to fulfil your plan to work for yourself.

In this guide, I’ll show you how to create a start-up budget for your new venture and calculate your start-up costs even if you aren’t totally sure how much they will be. I’ve also included a free template that you can use if spreadsheets aren’t your thing.

By the end of this guide, you’ll know how much money you’ll need to keep the lights on until your sales are in full-flow and plan for the unexpected.

So let’s get started!

Any Questions?

I’d love to help if you have any questions about this topic. Feel free to ask over in my group ‘The Self-Employed Club‘.

What are Start Up Costs?

Let’s start by adding a bit of clarity to the term ‘start-up costs’.

Start-up costs are all the one-off expenses you are going to need to pay to set up your new business, as well as ongoing costs you need to cover until your income reaches full capacity.

The reality is that even once you have set everything up, sales may not come flooding in. You need to give yourself time to start marketing yourself, finding customers and even tweaking your offering to get your income to the level they need to by.

By building out your running costs and make sure you’ve got enough cash in the bank to cover your ongoing expenses until your sales are sufficient to cover them and so you can pay yourself.

Start Up Budget Template

I’ve put together a start-up budget template that you can use, just click below or use this link and follow the instructions and I’ll send you my free spreadsheet.

Step 1: Input Your Start Up Costs

I’m going to work through filling in the start-up budget template with you, populating it as though I was starting a bookkeeping business from home.

Head over to the template and go to the tab ‘Start-Up Budget’. In the start-up costs section, you need to write down everything you expect you’ll need to buy to set up ‘shop’.

Generally, these are going to be items that you absolutely cannot do business without, that’s pretty much one-off purchases. For example, if you are planning to start an online business you may need a website. For my bookkeeping business, I’ll need a laptop to do my work.

As you do this, keep in mind that one of the biggest mistakes a new business can make is wasting money on things they really don’t need. So dig deep and set your mind to frugal mode by only adding things that are absolutely necessary. You can always spend more money in the future and keeping things simple will reduce stop the overwhelm, especially if you are short on time.

For each item add a contingency.

A contingency is a plan for any unexpected or missed costs. I know making estimates can be hard, and even though you do your best, you may be slightly out with your predictions. A contingency is a percentage wiggle room for any underestimations. Of course, your costs may come in lower than you predict, but it’s better to have a cushion rather than running out of money.

Here’s how my start-up costs look for my fictional bookkeeping business:

start up budget template example

Step 2: Calculate Your Monthly Overheads

Next, let’s start estimating monthly overheads. It’s rare that any new business starts selling at full capacity from day one. Reaching full sales potential takes time and, even as work begins to come in, overheads still need to be paid.

By including overheads in your start-up budget for a certain period of time, you’ll ensure you have some extra cash in the bank to pay your running costs and have breathing space while you look for work.

Overheads are costs that have to be paid, regardless of how much you sell. That’s things like:

  • Rent;
  • Salaries;
  • Insurance;
  • Email subscriptions;
  • Web hosting;
  • Accounting;
  • Bank charges.

Again you’ll need to add your contingency percentages and the number of months you wish to include overheads in your start-up budget.

Here’s how my monthly overheads look for my fictional bookkeeping business:

start up budget template example

Step 3: Identify Your Total Start-Up Costs

The spreadsheet will automatically add up your total start-up costs and monthly running costs. That figure is the amount of money you’ll need to get your business started.

For my fictional bookkeeping business that is £9,993.10 (£3,055.90 + £6,937.20). This is the amount I need to pay to get set up and give me 4 months to get my turnover at least sufficient to match my expected overheads also known as the break-even point.

How to Fund Your Start-Up

Depending on your business idea, you may find that your start-up budget shows you need some fairly significant up- front money to get off the ground. The most common ways people fund their start-ups include:

  • Personal loans
  • Personal savings
  • Loans from family members
  • Credit cards
  • Business loans
  • Government back loans like Crowdfunding

I’m not a financial advisor but don’t borrow money or use personal savings until you have a robust business plan and are confident about making sales. If you are struggling to find the funds, look at ways to pare your costs right back and start your business for less money – you’ll need to get creative! You can invest more later on, at a time when you are sure your business is working.

Step 4: Check Business Viability

Running a business is one thing, running a profitable one that pays you a salary, is another.

In my bookkeeping business, my monthly running costs are £1,713. That means I need to bill and deliver my clients this amount in fees to break even. So how many clients do I need to find? And how much should I charge them per hour to cover my costs and make a profit?

start up budget template example

Head over to the ‘business viability’ tab. If I estimate that I will work 6 hours per day and adjust for sick leave, holidays and admin time I can see that I need to:

  • Make sales of £23,411 to breakeven
  • Achieve a minimum hourly rate of £17.74

I know that, in general, bookkeepers charge around £15 to £35 per hour in the UK, so my minimum requirement is achievable. That means I know I have a viable business that can pay me a salary, along with covering overheads and taxes. I just need to make the sales.

Want to Read More About Becoming Self-Employed?

If you’ve enjoyed this post you may like to read more about becoming self-employed. Here are some of my most popular blog posts on this topic…

Any Questions?

I’d love to help if you have any questions about this topic. Feel free to ask over in my group ‘The Self-Employed Club‘.

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