Founder Finances: A comprehensive guide to creating a budget for your business
- Welcome to "Founder
Finances," a new Insider series that explains entrepreneurs' monthly budgets.
- Insider shares the exact budgets founders use to scale, market themselves, and build community.
- Owners of bakeries, dog daycares, and loungewear lines share exactly how much they spend each month.
Nearly half of new businesses fail within the first five years of operation, and financial struggles are among the top reasons for closures.
Despite the uncertainty of launching a new venture, entrepreneurship remains on the rise: According to data from the US Census Bureau, more than 5 million new businesses registered last year.
Insider spoke with entrepreneurs in a variety of fields about the monthly budgets that have led to success, with the goal of sharing insights on business finances. This series, "Founder Finances," shares tips on how to allocate money, stabilize your team, and prepare for growth, according to founders who've done it.
Financing for business launch
Shawn Brown operated CheeseCaked, a Georgia-based bakery, between 2011 and 2019. But, after taking two years off to recover from breast cancer, Brown needed a comeback strategy in 2021: Visibility, which included investing in social-media marketing and storefront locations, was her go-to tactic, she said.
"It really helps with brand recognition," she said. "We've become a celebratory space, it's an experience."
Building your personal brand
It's becoming increasingly common to see entrepreneurs who are front and center of their marketing efforts, especially as social media remains an essential component of customer acquisition. For Alexis Curtis, founder of multimedia and mentorship company Life Unfiltered, investing in a branding coach and professional photos gives her business clout.
"A lot of how I make money is my personal brand," she said, adding that it's important to create content that is both authentic and aspirational in order to grow organically. She allocates specific funds toward ensuring her content looks crisp and professional.
Determining your needs as a new company
Diandra Harvin, the founder of the luxury-loungewear company Noite Rose, said she primarily focuses her monthly
She said she spends nearly half of her monthly budget on public-relations services, which help increase brand awareness. She prioritizes this expense because she didn't have the necessary PR connections that would provide meaningful exposure for her brand.
"You can receive so many benefits from being with a PR firm, which is so different from marketing," she said, adding that having her products featured by celebrities and in publications has helped her get social recognition.
Planning ahead for busy seasons
Advanced planning ahead can be an important step to saving time and money. For seasonal businesses that net the bulk of their sales in Q4, preparing in the summer months can be vital, said Nicole Lewis, the founder of customizable crayon company Art 2 the Extreme.
She starts her holiday preparations in June, including PR outreach, campaign photoshoots, stocking up on inventory, and packaging supplies.
"Many of these costs during the slower months add up and keep summer profits down," she said. "But if I can't find those boxes come September, October, or November, that's going to pose a huge problem and disrupt my entire season."
Creating company culture in the office
After companies and storefronts closed doors during the pandemic, many workers saw in-office communities almost instantly stripped away. Though 59% of employees continue working from home all or most of the time, the potential for run-ins with coworkers or in-person meetings brings some allure to office life.
Branden Sewell, the founder of a painting company that booked nearly $500,000 in sales last year, said leasing office space has been worth the cost because it builds team comradery.
"It's really hard to build a thriving, healthy culture from Zoom or conference calls," he said. "I'm able to build culture and really have influence on my team, sit in front of them, connect with them."
Investing in employees to retain talent
A record number of employees quit their jobs last year, making the Great Resignation a serious concern for businesses trying to retain talent. As employees search for companies offering incentives like equitable pay, flexible schedules, and benefits, entrepreneurs are finding that investing money toward community building is necessary.
Supporting team members' interests and goals outside of work is one way to retain staff. That's how Peter Dufall, the owner of a dog-care franchise called Dogtopia, invests in his workers — he encourages his employees to take continuing education courses on grooming, veterinary tech, and CPR skills, which he budgets for in his monthly expenses.
Preparing for business expansion
"Buying more territory is always going to cost you," Park, who added that the pair is planning to spend around $30,000 on their next franchise expansion, said. "That tends to be more of a mandatory spend that comes along with growth."
- Oppo Find N3 Flip long term review - The end game for flip smartphones
- ED files first charge sheet against Chinese smartphone maker Vivo-India, others
- Redmi 13C 5G vs Redmi 12 5G – Battle of the budget Redmi smartphones
- Creating a search friendly resume – Here’s how to crack the ATS code
- Gold rush: Don’t recycle or book profits yet, another bull-run on the way say analysts