Not sure how to budget for your startup? From startup costs to contingency planning, Alessandra Camargo, associate director of the Chelsea & Casey Baugh Entrepreneurship Institute, shares expert strategies for building a strong financial foundation to set your business up for long-term success.
Starting a business is exciting, but without a solid financial foundation, even the best ideas can fall apart. Whether you're preparing for an official pitch competition or launching your first startup, understanding how to budget and plan for funding is one of the most important preliminary skills you can develop as an entrepreneur.
Alessandra Camargo, associate director of the Chelsea and Casey Baugh Entrepreneurship
Institute, shares some of her best tips and strategies for structuring your initial
budget for a startup venture. 
Before seeking outside funding, you need to know your numbers. Exact numbers. Organizing a startup budget helps you determine whether your business idea is actually viable and sustainable— not just as a passion project, but as something that can pay the bills going forward. “It’s important to create a budget to make sure your business will actually be profitable,” Camargo explains, “[A startup budget] should include startup costs, monthly expenses, revenue projections, and a buffer for the unexpected stuff.”
When estimating startup costs, Camargo recommends talking to people who have already built businesses in your space, researching similar companies, and assuming things will likely cost more and take longer than you expect. Fortune favors boldness and preparation.
One of the most common mistakes student entrepreneurs make is projecting revenue that is too high, too fast. “Most students think they’ll be making millions by year two or three, and while I hope that’s true, it usually takes longer,” Camargo stated. According to a study completed by Silicon Valley Bank, the average incubation period for a new startup typically extends much longer than two years. Most startups will take a little longer to become profitable than founders anticipate at first, and that is OK, so long as you have prepared for it! A projection does not need to be 100% perfect. What matters is that you are making educated, well-informed estimates and revisiting them regularly to ensure their accuracy.
“The best way to forecast monthly expenses is to start with your fixed costs,” Camargo explained, “Then, layer in variable ones, and update [your numbers] every single month based on what is actually happening.”
Student entrepreneurs should be prepared for lower-than-expected revenue, rising expenses, and the possibility of needing to pivot or cut a product line that is not working. Planning for these scenarios from the start — rather than scrambling when they happen — is what separates resilient founders from those who give up too soon.
Contingency funding can come from personal savings, a small emergency fund, grants, or pitch competitions. Sometimes it also means making sacrifices in your personal life, like skipping a trip or cutting back on eating out, to keep your business moving forward.
Although there are myriad amounts of exceptional expense tracking tools and business management platforms, you do not need expensive software to manage your finances when you are just starting out. “Once [your startup] is growing, that’s when it makes sense to pay for software,” Camargo stated. In the meantime, keeping a well-maintained Excel spreadsheet is enough as long as you’re diligent in keeping it updated. As your business grows, it may make sense to invest in accounting or financial planning software later down the road, but do not let the lack of fancy tools be an excuse to avoid the numbers altogether.
“Finances are one of the most important parts of your business. Learn it early, and if it’s not your strength, find someone who can help you,” Camargo advised.
Ready to turn your idea into a business? The UVU Chelsea & Casey Baugh Entrepreneurship Institute connects student entrepreneurs with the mentorship, resources, and funding opportunities they need to forge their ideas into reality. Learn more about how you can join a dynamic, inspirational community committed to helping entrepreneurs succeed.
