Before You Start
The budget most new founders make leaves out the largest line
Start-up budgets list equipment, stock, rent and a website. They often leave out the founder's own living costs, the months before revenue arrives, and the delays that come with every first-time project. This session helps each participant build a first-year budget for their own business, with founders describing what they had left out.
Explore this page6 sections
Businesses rarely run out of ideas. They run out of months.
First years commonly run longer and cost more than the plan said. The first customer can arrive later than hoped, payment later still, and the household still needs to be fed every month.
A budget that includes only what the business spends hides the real question, which is how long you can last. That depends on your savings, your household costs, who else earns, and what happens to your income when work is irregular.
This session is a working session, not financial advice. It gives you the structure for the budget and the questions to take to an adviser. It does not quote costs for any trade, because they vary too much by city, sector and scale for a general figure to help.
What goes into a first-year budget
36 topics across 7 areas. Seven headings. Each person fills in their own numbers from quotes and records, not from memory.
Set-up CostsOne-time spending before the first sale.5
- Equipment, tools and fittings, new or second-hand
- Deposits for premises, utilities or suppliers
- A first stock or raw material purchase
- Branding, a basic website or listings, kept to what is needed
- Registration and licence costs, checked on official sites
For each item ask: could I start without it, and buy it after the first payment?
Running CostsWhat goes out every month whether or not anything comes in.6
- Rent, electricity, internet and phone
- Software, tools and subscriptions
- Transport and delivery
- Wages for anybody helping, including family who expect pay
- Insurance, where relevant to your trade
- Repairs and replacement
Compliance and Professional CostsEasy to leave out, hard to avoid.5
Ask a chartered accountant what you must do now, what can wait and what each costs in fees and in time. Rules and thresholds change, so confirm current requirements on the official sites rather than relying on an article.
- An accountant for books, tax filing and any GST filing
- A lawyer for agreements and, where needed, incorporation
- Licences and renewals specific to your trade
- Late fees, which are the most avoidable cost of all
- Bank charges and payment gateway fees
What You Live OnThe line that decides how long you can last.5
- Your household's essential monthly costs, written out
- EMIs, rent, school fees, insurance premiums and support for parents
- Other income in the household, and how steady it is
- Health cover for you and the family, especially if it came from an employer
- A decision about how much you will pay yourself, and from when
Time to RevenueThe gap between spending and being paid.5
- How long a sale takes from first conversation to cash in the bank
- Credit you may have to give customers
- Advance payments to suppliers
- A slow month, or three, in your first year
- What happens to cash when one large customer pays late
A BufferSized to your situation, not a formula.5
- The number of months you could last with no income from the business
- What you would cut first, and what you would never cut
- Whether family can help, and on what terms, said openly
- The point at which you would stop, agreed in advance
- Keeping personal and business money in separate accounts
Ways to Spend LessWithout making the business look unserious.5
- Start at home or in shared space where the work allows
- Hire, rent or borrow equipment before buying
- Pay suppliers on terms, where they agree, and customers in advance, where they will
- Buy for the first three orders, not for the first three hundred
- Check any loan's total cost, not just the monthly instalment
Borrowing is a decision for you and a lender or adviser. This session explains the questions, not the answer.
Costs people most often leave out
- Their own salary for the first year
- Tax, accountant and compliance costs
- Health insurance after leaving a job
- Delays in being paid
- Replacing equipment that breaks
- Time, including the weekends it takes
What participants leave with
- A one-page first-year budget in their own numbers
- The number of months they can last
- A list of purchases that can wait
- A set of questions for their accountant
- A date to review the budget against what actually happened
How the session runs
One or two founders describe what their first year actually cost compared with what they planned, including what they had not budgeted. A template is then worked through line by line, and participants fill in their own numbers in a small group. Bring your household costs and any quotes you have. Evening or weekend sessions, in person or online. Speakers describe their own experience, and no figures are offered as typical for any sector.
What your students leave with
- A first-year budget with set-up, running, compliance and personal costs on one page
- A figure for how many months you can run without earning from the business
- A list of spending that can wait until a customer has paid
- A way to estimate costs from quotes and real prices rather than guesses
- A buffer sized to your own situation, not a rule of thumb
- Questions to take to a chartered accountant about tax and compliance
Scheduled sessions
Nothing scheduled yet
Sessions are arranged with a college once a date is agreed. Ask us and we will find the right person for it.
A student rather than a college? See what is coming up, or ask your placement team to host this.
Know how many months you have before you decide how much to spend.
Tell us who your students are and what stage they are at. Sessions are free for participants.