You have a brilliant idea. You’ve done your research and the market is ready. You have a business name, logo and website ready to go. Within weeks of your launch, your fledgling business is flying, albeit with a few stutters but it is off the ground!

Now comes the hard bit: keeping the business growing. There are many things that contribute to the success or failure of a business, like budgeting.

The Skill of Budgeting

Budgeting within a start-up takes skill and know-how. There needs to be an understanding of the basics of budgeting and financial management but it also takes foresight. Of all the issues that can bring a new business to a grinding halt, money (or lack of!) is it. So, what do you need to think about and what needs to be closely managed to keep the finances of your start-up stable


Perhaps the most important part of managing the finances of your business is understanding whether you are making a loss – not making enough money to cover running costs, wages etc. – breaking even or a profit. Even a small profit is worth its weight in gold because it means you are getting it right.

To increase profit, you need more customers whilst keeping running costs and overheads low. To do this, you need to manage your business finances daily.


When you make a profit, you need to decide what to do with it. Depending on the type of business model you are using, a partnership, public company etc., will also dictate how you can use this profit.

You may take it as a personal gain or you may choose to invest it back in the business so that you can grow and expand it. As an accountant will tell you, you will need to balance this profit figure as the more net profit you declare, the more tax you will have to pay. It’s all a question of balance, something your accountant can help you with.

Personal Expenses

A start-up with rarely immediately employ people other than the entrepreneurs who started the company, unless they have significant financial backing from a bank or lender. But, as the owner of the business, you are entitled to take some money out on a weekly or monthly basis (or yearly) as personal expenses or a wage.

Clearly, you need to pay yourself and by doing so, it keeps your own personal expenses – mortgage or rent payments, shopping, going out, entertainment. Whatever you do to stay entertained, whether that’s heading to the bar or playing on a gaming site – it is so important to separate regular expenses from the business. Otherwise, you’ll end up in a web of financial confusion.

Cash Flow

But just as you need to be paying your suppliers, you need people to be paying you and for any business, but especially a start-up, continuous cash flow into the business is essential.

Financial mismanagement, whether intentional or through inexperience, will cost your start-up dearly and could make the difference between sky-high success or a miserable failure.