Overestimate expenses and underestimate revenues
When you are planning your new business, it is wise to overestimate expenses and underestimate revenues. No matter how well you budget and watch costs, your expenses will probably be 25% higher than you initially anticipate.
New Staffing and Recruiting Firms do not immediately generate revenue. You must attract clients and candidates, obtain orders from clients, present your candidates, have them complete the interview process (which can take up to five weeks), your candidate will hand in a two week notice and most invoices are paid in 30 days. The process is faster if you specialize in temp or contact staffing.
Being conservative in your numbers doesn’t mean you are selling yourself short. It just means you have information you can work with when you are calculating when you can afford to focus on your new business full-time. If you are not making money, you have a hobby not a business.
You don’t want to find yourself behind a financial 8-ball which will force you to accept a job vs setting up a profitable business.