Startup Budget: Don’t Make These Common Mistakes

Before planning your budget, it’s worth to take a moment and rethink your financial strategy in order to use your prospective funds as efficiently as possible.

Common Mistakes of Startup Budgets

Even though startups are meant to focus on the creative work, they cannot escape that one thing, which always comes up whenever we talk about business: financial management. A good startup budget plan is in this case practically a deal breaker – not only because it plays a crucial role in keeping a start-up solvent, but also due to its importance in investor seeking.

Before planning your budget and handing it over to those that might be interested in financing your idea, it’s worth to take a moment and rethink your financial strategy in order to use your prospective funds as efficiently as possible. Here’s a selection of some of the most common mistakes start-ups make when planning their budgets.

Not Having a Start-up Budget at All

This sounds a bit crazy, but it still happens – the creatives, who have great ideas and look for ways to implement them, sometimes find it hard to discuss their projects from the financial point of view. When talking with investors, start-ups simply must know how much money they will need and how to allocate it – otherwise, they might expect much trouble in the future.

Underestimating the Costs

When planning a startup budget, some costs might get underestimated, other – completely forgotten. This kind of lapse in judgment might even jeopardize the future of a start-up. When planning the budget, we simply must take the totality of situation into account. If we’d like to hire a marketing specialist, for instance, our estimated costs must include not only his salary, but also all the equipment he’ll require to do his job: a desk, a laptop, licenses and proper software.

Overestimating the Profits

A revenue analysis is an important part of every startup budget plan, even though it rarely corresponds to the reality of a business. The most common mistakes start-ups make in this area are: forgetting about the seasonality of business, overlooking the possibility of customer resignation and assuming an overly expansive monthly revenue growth.

No Marketing Budget

No marketing means less or no clients at all. Period. Now, the wonders of our digital era might convince us that a marketing strategy is an unnecessary cost – after all, we can manage our social media channels just fine. But the reality of the business will soon verify this belief. Generally, the rule of thumb for creating a marketing budget is 5% of the projected annual revenues, but every marketing budget should be cut to fit the requirements of the business in question.

The Question of Salary

This is a hard one – start-up creators might believe that their esteemed role guarantees a high salary, but in reality, it’s the creative who should be the first ones to renounce from it in order to help their creation grow. If you’re a start-up creator and you’re planning to enjoy every bit of your extremely high salary, think twice. Consider this from the perspective of your investor – you’ll get the money immediately, while he will need to wait for years until the business brings profits.

If you’re planning to start a new business or if you already are a small business owner, head to for the latest business news and advice.

Originally posted on

Previous Article

Original and Targeted, BtoB Content Equals Sales

Next Article

If you’re not doing this one SEO basic, you’re doing it wrong

Related Posts
Read More

Entrepreneurial Spirit Drives a Mission to Connect People With Popongo

America truly is the land of opportunity, especially to people who grow up in third world countries and fight adversity every day while seeking to create a better life for themselves and their loved ones. Creating Popongo was one such opportunity, a chance to challenge myself as well as fill a need and connect  people....
Read More

Entrepreneurs: How to Focus Ruthlessly and Win in 2022

New and aspiring entrepreneurs often fall victim to impatience and imperfection. When something’s not working perfectly to their standards (or worse, fails), they take it personally and don’t know how to move on to better iterations after the setback. But that’s what startup life is all about. To win, you have to learn how to...
strategic annual plan
Read More

Why The Traditional Strategic Annual Plan is Failing You

For small to mid-sized enterprises, the annual strategic planning process can be fraught with frustration. On one hand, it is acknowledged that the most accepted best practice for a business to go from their vision to achieving their stated result, for example, grow revenue by 5x over 24 months with existing resources and infrastructure, is...
venture capital
Read More

Startups and Venture Capital: What Do They Spend Their First Round On?

There are more startups than ever before post-pandemic. As the e-commerce industry continues to boom and work from home remains a trend amongst the corporate sector, more entrepreneurs are using their funds to create new digital startups in a number of niches. However, from staffing to manufacturing, starting a business does not come without its...