How to define a budget for the incorporation of a company in Colombia?

The incorporation of a company beyond establishing or translating a business idea, there are a couple of things that must be put into practice from the initial phase so that some pillars and standards are established for future decision-making and continuous growth.

For this to happen and before launching the business idea to the public, a budget must be defined for the incorporation of the company and for doing so we must first bear in mind that the budget is an advance calculation in which the expenses and income are defined in a certain time or period.

In this article we will explain the factors that must be considered when creating a budget for the incorporation of a company in Colombia

How to calculate the initial budget of my company?

Identifying this will give rise to the first steps of the incorporation of the company, it is of utmost importance before starting to identify what type of company you want to incorporate and the business model.

Once we are clear about this, for the initial budget we must consider the following:

Startup costs:

Here enter those expenses that will be used to capture and define the business idea, such as: Market studies, search for suppliers, brand creation, supplies, per diem, transportation and everything that is needed to establish where the company will go.

Installation costs

Whether it is an online or physical business, the expenses involved in any of them must be determined.

In the case of being physical, the expenses to consider are the rental of the premises, the infrastructure, the changes, and facilities that will allow the continuity of the operation, security, services, etc.

In the case of an online business, the services or products need to be on a website so that users can know more about them and the company in general. Therefore, the cost of creating the website, hosting, domain, and layout of the idea in general must be stipulated.

Management and organization costs

In this case, the expenses of registering the company and the costs of drafting the constitutive document, books, commercial and fiscal records, taxes, among others, are included.

The budget for the incorporation of a company in Colombia is calculated based on capital, economic activity and domicile, among others. The steps that you will find below will serve as a guide when starting the formalization of the company and this information must be considered so that everything goes well.

1. Request for authorization of the company name in the Chamber of Commerce.
2. If the name is authorized, go to the DIAN to process the Pre-RUT (Tax Registry).
3. Open a bank account in the name of the company in process of incorporation.
4. Back to the Chamber of Commerce to consign documents and books necessary for the registration of the company.
5. Once the company is registered, it will return to the DIAN to process the final RUT and the Tax Identification Number, NIT.
6. Get the authorization to invoice at DIAN.
7. Register the company in the Social Security System.

As you may notice, to define the budget for the incorporation of a company in Colombia, it covers several topics, but not only must a budget be set based on what is going to be spent prior to the incorporation of the company but also what must be considered. following:

Forecast monthly sales

Despite not having clarity at the time of starting, managing a sales estimate will allow you to have an overview of what is expected and to be able to establish goals to which you want to reach and direct the operation to it.

This must be done in a very objective, measurable, and achievable way, so that once the break-even point is reached, progress can be made based on this budget.

Create a cash flow statement

Defining income and expenses will make your company organized and aware of everything that happens in the operation as well as having everything up to date on its obligations.

Since you start your entrepreneurial process, putting on paper what you are going to invest versus what you are going to earn will allow you to always be one step ahead.