How to make 1+1 = 3

For most new companies outlining the first budget and then trying to keep up with it, often turns out to be a huge challenge. Not necessarily because business is slow, but rather because many new entrepreneurs tend to be overly optimistic. Or they may forget important details like taxes and insurance. How do we know this? 

We had a talk with a Nordea advisor about the value of realistic budgeting and the value of having a reliable banking partner. And to give you some relevant perspective, the founder and CEO of the Norwegian company Jarga Design will explain the importance of working continuously with your budget.   

“We often see, that first-time entrepreneurs very rarely can keep their private economy and their business economy separated.”

At Nordea Oslo we meet up with Business Advisor Per. Per has helped hundreds of companies during his 3,5 years of counseling small entrepreneurs and he has some valuable insights on how your private economy will be affected by you starting your own business:

“Generally, if you have a single person company or are starting up a business for the first time, very rarely can you keep your private economy and your business economy separated. They are going to be entwined. What money you take out of the business is going to affect your private economy and what collateral you can put up for your business is going to be affected by your private economy.”

What Per suggests is, that you plan as much and as thoroughly as you are capable of. And he stresses the importance of not ignoring the risks that lies ahead, when you start your own company.

“Starting up something new, you’re leaving the safety net and you have to realise the risks you’re taking and really consider if the reward is worth it. So, when you mark up your budget, double the miscellaneous part, because there’s going to be surprises. Every time you start a new business there’s going to be surprises.”

“My business plan and budget are always under construction and in development.”

Jankeh Njie Jamanca, founder, and CEO from Jarga Designs in Oslo managed to build her business without funding from either investors or a bank loan. She brought her own money. The making of her company has been her personal achievement every step of the way. Of course, she has received help from friends and family, and she works closely together with her team of photographers, graphic designers, and stylists. But, as far as money goes, she is as independent as the day she founded Jarga Designs. But what does she do to keep her budgets and finances in check?

”From the very beginning, I have made business plans and budgets myself. But not entirely without help. Both YouTube and Google have been a great help for me. And when I have written my business plan and made my budget I hand it to someone I trust and who knows more about the business side of things than me, and they help me finish it. But, my business plan and budget are always under construction and in development. I can do this because my business only relies on my money. And I would like to keep it that way.”

At least once a year Jankeh travels to Gambia to buy fabrics for her designs. Money for these travels is always included in her budgets, of course. Home in Oslo she has settled with a shared office space. Her cautious approach to keeping the costs of her company down is exemplary and something to be inspired by.

How do you plan to keep your expenses down in your new company? And how do you plan to meet the budget you have outlined?