Our earlier post lectured on the subject of money. Boring, right? Apologies for that. Handling money is just one of many non design skills needed as business owners.

Continuing along the same subject, Chris, Stefan, Leslie and Neil reach back into their pasts. Back to when they were start-ups. Back where they planned, budgeted, scraped by and made it through to today.

Chris’s money management

How we managed our money:
We first looked at my spouse’s finances and determined whether or not we could even survive on her income alone. After much consideration and crunching of the numbers, we realized we could make it, but life was going to change. Previously, we worked Gonink part-time and essentially had 3 incomes in the house. It wasn’t anything to say “Want to buy this?” and the answer was a resounding “Sure!” As soon as I quit my full-time job, it (purchases) became more of what’s necessary and what is not.

Our plan and budget:
Personal finances were first and foremost and the first thing we did was payoff anything we could. Things such as paying off my truck, personal credit cards, small home loans, etc. By doing so, we gave ourselves more “wiggle room” when it came to buying things for the business before we officially opened our doors. Because let’s face it, when you’re first starting out, your personal finances are going to help supplement your business and you don’t need any extra payments lying around while you’re trying to get the business going.

We looked at several different loan options for our business and we found that a personal loan would work better for us than a business loan. We then would budget x-amount of dollars for equipment purchases, software and stationary stuff like folders, pens, pencils, etc. Once the business opened and some money started coming in, we did our best to focus at least 25% on marketing. This was for advertisements in newspapers, flyers and even extra signage outside of our business. But there is an interesting money factor in any business that I never even considered when I was laying out our business plan and budget. When you look at any business, think of all the ‘invisible’ things you need to buy just to sustain a “life” at work. Things like toilet paper, cleaning supplies, kitchen utensils and other things become after thoughts and even though it seems menial, they are part of running a business.

Chris Tomlinson | Communication Designer
Gonik Design & Print | Gonik Blog

Stefan’s Money

My situation was very fortunate. I was able to take over a company that already had a steady stream of income and a healthy client base. However, I didn’t jump in without some back up plan. So, using my family’s long business relationship with the bank, I was able to secure a pretty substantial small business line of credit. Even my banker was still surprised that at my age I have been able to have some pretty great opportunities fall into my lap. Like I said, I like to exploit opportunities any time I can.

Stefan Bean | President/Creative Director
Pulse Creative Partners, Inc. | BoDo Author | Bean’s Biz

Leslie’s money

Absolutely, I budgeted. And I had several months’ worth of expenses (living and work) saved up. It is much better to be prepared and in my case it was essential as I was single and had no fallback position (except to get a job). That being said, there are lots of resources for start-up funds in the USA. SCORE.org has seminars (very cheap) on financing a business and you’ll meet the very people who can help you at these events.

As for managing living & working expenses, I started from day one with separate accounts, credit cards, and data files. I use Quicken for my home accounts and QuickBooks for my business ones. It is vital to keep your accounts separate. For example, in the USA you can deduct credit card interest as a business expense, but ONLY if it is a credit card you use exclusively for business.

I recommend that, unless you have a strong background and ability in bookkeeping, you get an accountant when you launch your business. It’s a very real (and deductible) business expense…and one which will save you lots more than you’ll spend.

Leslie Burns-Dell’Acqua | Creative/Marketing Consultant & Coach
Burns Auto Parts–Consultants | Burns Auto Parts blog | Podcast | Book

Neil has no money, honey

I did put together a formal business plan and budget, but didn’t really have adequate capital. I ended up funding the start-up with what I made from freelancing. A wing, a prayer and 50 bucks. After a bit, we were generating enough revenue to put some money aside for “start-up” capital … sort of after the start-up.

I was fortunate to have a wife who was a crackerjack sales person. When we were [formally] putting the business together, she handled the sales and client contact during the day while I worked my day job. My salary was enough to cover our living expenses. We did cut out some things like vacations, dining out and such until we had put some money aside to keep us afloat after we went full-time.

Neil (nt) Tortorella | Marketing Manager
Tortorella Design | The Marketing Mind | Creative Latitude | BoDo Team | Marketing Minute

Later in the life of BoDo (no, not now, not in this series), we’ll bring in an expert to write about small business book keeping. Someone who will share their expertise. And make it fun. Well, maybe not the fun part.

Next in the BoDo Niblets: Starting Out and Setting Up Series we’ll discuss the pros and cons of working out or in.

Until then,
The BoDo Team
cat - nt - jay