Melissa is a mother of 2, lives in Utah, and writes for a multitude of sites. She is currently the EIC of HarcourtHealth.com and writes about health, wellness, and business topics.

Having an entrepreneurial streak is essential for anyone contemplating starting up their own business. Without the drive and confidence to cope with the pressure you’ll be under, and the insight into your industry that guides you toward the most profitable path, it will be tough going. However, there remains one aspect of starting a business that can be a struggle for many entrepreneurs, and that’s the budget.

A budget is an essential element of your business plan and plays a pivotal role in raising finance from banks or investors. It’s also crucial for initial stability and ongoing financial management and should be one of your key documents throughout the life of the business.

Many entrepreneurs concentrate their efforts on the potential of their business without giving due consideration to the costs they’ll incur and how these can change. Even if you find budgets and calculations less exciting and interesting than the core purpose of your business, you can’t afford to neglect the budget, or you’ll inevitably run into problems down the road.

The most important point to remember when creating your budget is that you must be as accurate and realistic as possible. If you’re basing the success of your business on operating with a 40% margin, but your costs haven’t been accurately researched, then you could be running at a considerably lower margin, and thus have a greatly reduced net profit. Every figure you enter must be checked for accuracy, and not manipulated to make the balance column look better.

Many business owners look at their initial budgets and decide the costs are too high, and something needs to be cut, while others start with as few costs as they can manage to operate within an effort to make the bottom line look more appealing. While you may be able to economize in certain areas, you shouldn’t be squeezing the budget so hard that you’ll end up with cash flow problems and being unable to meet your customers’ needs.

Another problem entrepreneurs frequently come across in their budgeting is the forgotten costs. For example, importantly, have you considered the importance of life insurance? If anything should happen to you, how will you or your family cope with not only the expenses incurred but for the loss of income?

Even if you don’t have a family to worry about, you’ll find many financial institutions require that you have life insurance in place before they agree to a business loan, so their repayments are covered. If you don’t want to get tied into a long-term commitment, ART insurance policies are perfect for short-term life insurance cover. You should also think about other types of insurance you’ll need, like health and disability cover.

With all the resources available to entrepreneurs, and access to business and accounting experts who have the expertise to guide you with your budget, you have all the tools you need to create an accurate and valuable budget for your new business that will guide you to a profitable future. You just need to understand the importance of that budget and ensure it has everything in it, and that all your figures are as accurate as they can be.