Depending on how you set up your business, the cost of starting your wedding planning firm might range from almost nothing to thousands of dollars. Obviously your start-up expenses will be much higher if you decide to rent space and buy equipment.
You will also need to consider your ‘working capital’ requirements. This is the money you will need for the day-to-day operation of your wedding planning company. If you are buying supplies for the wedding, you can ask for a deposit. But there are other expenses that will come out of your pocket before you get your first client – such as business cards, telephone etc.
Many entrepreneurs are optimistic about how much money they will earn from their business, and how quickly they will earn it. While you may be tremendously successful right from the start and exceed your own expectations, it is wise to be prepared for the possibility that it may take longer than expected until your business is earning enough to support you.
A standard rule of thumb is to have six months living expenses set aside beyond your start-up costs. Or you might consider remaining at your current job and working part-time on your wedding planning business until it is established.
If your own personal resources won’t cover all the things you would like to do with your business, you will need to look for financing.
Start close to home. Maybe you have a family member willing to invest in your company or give you a start-up loan? To avoid any misunderstanding, it’s wise to get any agreements in writing even with family members.
If you decide to approach a bank for a business loan, be prepared. Write a loan proposal that includes detailed information about your business, how much money you want to borrow, what you plan to do with the money, and so on.
Keeping track of your money
There are a variety of resources available to help you keep track of your business income and expenses.
You will need to open a business banking account. You can shop around to find a financial institution that is supportive of small business, or use the same one that you use for your personal banking.
In addition, you might want to consider talking to your financial institution about the following:
Your bookkeeping system is a record of your income and expenses. To keep track of your expenses, you will need to keep copies of all you receipts. This can sometimes be a challenge for new business owners who might have a habit of tossing out receipts for small items or not asking for receipts in the first place. However you are likely to have numerous small expenses related to your business, and these can add up over time.
The petrol you put in your car (or mileage you drive) to see a client, the latest issue of a wedding magazine, a book on weddings, the fee for your ticket to a bridal fair – all of these expenses should be accounted for so you can minimise your taxes.
And of course, knowing exactly where your money is going will help you to plan better and cut back on unnecessary expenses. So make it a habit to ask for a receipt.
Xero is a brand new cloud accounting program that makes it easy to manage your business expenses and accounts. Visit: www.xero.com/us
If you are too busy, or you prefer to leave it to the professionals, you can hire a part-time bookkeeper on a contract basis. They could do a few hours a week, or fortnight, depending on how busy you are, and get your books up to date and balanced with your bank statements. You can find a bookkeeper through word of mouth or the Yellow Pages.
An accountant or tax adviser can be worth the expense – they can save you hundreds, maybe thousands of dollars at tax time. To find one, try word of mouth, or the Yellow Pages.
Please go to My Account to view your Course. Enjoy Learning!