Article

Plan to Succeed

Heather Stewart

August 1, 2012

Launching a new business without a clear sense of revenues and costs is a recipe for failure. This sample budget worksheet, along with some advice from seasoned mentors, can help provide a clearer picture of your projected bottom line.

Sales Revenue
“The most difficult thing is to forecast your revenue,” says Ron Tucker, president of the Salt Lake SCORE. “Make sure that it’s not a dollar number just taken out of the air.” Instead, tie it to something tangible, like an estimated number of products sold or services performed.

“People tend to be overly optimistic about what [revenue] is going to be,” says Tom Vollbrecht, entrepreneur in residence at the Miller Business Innovation Center. “They need to figure out early on who is going to buy their product and what that uptake is going to be.”

Owner’s Draw
Tucker advises new business owners to budget in a set amount for their compensation. “Make sure that it’s a fair market value—what you’d have to pay if you had to replace yourself.”

Details of a business budget depend to a large extent on the industry, says Vollbrecht. For example, “Software companies aren’t so good at accounting for the fact that they are going to have continuing development and maintenance costs.”

Vollbrecht advises would-be business owners to find mentors in their industry who can fill them in on the budget line items that may not be obvious, but can throw a wrench in plans if not accounted for.

Resources:
Salt Lake SCORE
http://saltlake.score.org

Miller Business Innovation Center
www.mbrcslcc.com/mbic

For a list of statewide
Business Resource Centers:
http://goed.utah.gov/start/Business-Resource-Centers/

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