Create a Savings Buffer

Having a few months’ worth of income in your savings account can really help reduce financial stress when first starting out. Because your income may drop in the beginning (not to mention the security of having an employer provide both work and steady paychecks), try to save at least six months’ worth of expenses before leaving your current job.

Knowing you have a buffer allows you to move full force into your business without the added stress of having to match previous earnings right away. Maintaining this buffer along the way ensures you always have enough to cover slow times (yes, every small business has them).

Create a Business Plan

A business plan is essential if you want to build a successful business. Not only does this plan provide a clear outline of how you want to run your business, it also gives you a realistic view of how much your small business will cost to operate each month.

Use your business plan to create monthly budgets, purchase equipment and supplies, and determine how much you need to cover additional costs including rent, utilities, Internet service, employees, and other costs pertaining to specific business needs.

A business plan can also give you a much needed reality check – if you don’t have the means to cover expenses upfront (try to have at least a three month business expenses buffer for startup costs – this is separate from your personal savings buffer), you may have to postpone starting the business until your financially able to do so.

Consider All Your Options

Do you really need a storefront right away or can you get by using your home office? Do you need employees? Do you need upgraded equipment now or can you buy the basics and upgrade over time? While you don’t want to scrimp on all equipment and supplies when starting out, there are some things you can probably do without until later when you’re more established. Get creative!