How to start a small business from home – Forbes Advisor
Your financial needs will vary greatly depending on the type of business you plan to start. You will want to create a proposed budget, as well as financial projections, to ensure that you are financially prepared and to present to potential investors and lenders.
Create a budget and financial projections
Before starting your business, you will need to ensure that there will be enough income to be sustainable. You will also want to estimate how long it will take to generate a profit and the amount of anticipated profit. For example, a service-based consulting business will likely have very low start-up costs, but a product-based business, such as a restaurant business that you run from home, may have higher initial costs.
Financial projections are estimates of how much money the business will earn and spend over two to three years. If you’re considering getting a loan or other financing, potential lenders and investors will likely want to see your financial projections so they’re clear on when they’ll see a return on their investment in your business. You can create your own financial projections or find a template to use, such as those available in Microsoft Excel.
Develop a plan to keep an eye on finances
To get your finances in order, you also need to consider how you will process and record your sales, expenses, income, and income once the business is up and running. There are several third-party providers that can help you with merchant account services, and we’ve ranked the best options for small businesses here.
Open a business bank account
Opening a business bank account helps separate the income and expenses of individuals and businesses. Using a business bank account can make it easier to track and record business income and expenses for accounting and tax purposes. You can open a business bank account at your local branch. You can also consider getting a business credit card. Get step-by-step instructions on how to open a business bank account.