Starting Smart If your outgo exceeds your income,then your upkeep will be your downfall.

Running a profitable new business requires adequate cash flowand that operating expenses consistently be met. Once you'vesettled on a business idea and have completed adequate preliminaryresearch, the time has come to develop your first estimated annualbudget.

Even the most conscientious person who tries to budget for anentire year may underestimate or overlook a variety of everydayexpenses. Budgeting problems can result from miscalculations,overspending, or, quite simply, growing too fast. Before jumpingin, keep in mind that the budget for your first year must includeboth one-time start-up costs and ongoing monthly expenses.

Whatever your situation, a good budgeting rule of thumb is toerr on the side of caution. This means it's usually best tooverestimate your expenses-and the time it will take until yourbusiness can cover its own costs-and underestimate potentialprofits. Be sure to incorporate advice from others who are runningbusinesses similar to your own. Better safe than sorry.