Budgeting Helped Me Launched my Business
I am entrepreneur, an organizational psychologist, and HR consultant. Until 2015, I pursued a career as a human resources executive with experience in establishing, structuring and managing human resources functions to create added value and achieve business objectives in different sectors such as consultancy, telecommunication, technology, finance and insurance. In 2014, after nine years in this path, I realized that if I were to continue my career in the corporate world and become an HR executive, it would be because I had a successful career path, a good income, as well as reputation and mobility to work abroad. However, I couldn’t stop feeling there was something still missing in my professional life - I was not to be able to achieve my dreams.
I wanted to start my own business as an HR consultant and integrator for international and local entrepreneurial projects, but before I made such a bold move, I needed enough courage to understand exactly what I wanted and assess whether I was capable to achieve it with confidence, both psychologically and financially. My starting point was coming up with a financial plan.
Prior to quitting my job in 2015, I worked on a step-by-step business plan for 1,5 years. I attended start-up meet-ups to learn from others, which was especially helpful to find out if I was psychologically ready to take on this new journey. I revived my social network, looked for advice and was provided feedback.
One day I discovered I was finally ready to afford my the new venture for 2 years, even if I would not get any investment, so I decided to make my dreams come true. I quit my job and started volunteering at the University to develop a few projects. During this time, I also did some freelance work for corporate organizations for about six months and continued planning my business and financials in detail. One of the crucial decisions I made along the way was to partner up with a colleague and I learned that it does not matter whether you are running a start-up company or a holding, the skeleton of your business should always stand on legal and financial grounds.
Before officially founding my company I calculated my income, my expenses and the money I needed to save. Also, its always useful to seek for legal and financial advice from professionals while doing a financial plan. My partner and I decided to act smart and made our business plan according to the “minimum spending and maximum gain” principle. We decided to start as a home office with flexible working hours and we did not to enlarge our team until we reached our financial target. Our plan was not to get any credit from any public or private investors for at least one year. We outsourced the creation and brand designing of our business website through social networks so we could have the lowest available price.
Another important part of financial planning is budgeting. To create an effective budgeting strategy, you should track your income and expenses periodically. For example, we realized that our current customers have tendency to make deferred payment agreement for our consultancy services. For this reason, we created a cash flow statement which helped us for tracking the flow of our income and analyze our expenses. We also avoided having unnecessary spending in our business and/or luxuries in our social lives. Moreover, we decided to focus on governmental foundations for our newly developed projects. We are currently trying to make agreement with organizations at fixed fee which may also help us to forecast our income regularly.
Starting your own business as an entrepreneur is not easy. Especially in developing countries! You have to have plan A, B, and C for all unexpected issues and you should get annoyed for doing every piece of the work. For example, at my previous jobs, I was holding managerial positions with medium-sized teams, and I was responsible for building strategy & high-level designs, but not responsible for the operational works. However, in my business I am doing all pieces of my work to keep moving it forward. My partner and I have also designed alternative channels to bring in new customers such as SMEs, universities, community, and NGOs, rather than just focusing on the bigger companies.
After 1,5 years from starting this journey, I have come to realize that to start a business you need: 1) financial plan; 2) budgeting strategies; and 3) social support from family and friends. Starting a business changes your lifestyle and mindset. It has ups and downs, but it is very fulfilling and instructive!