The ins and outs of R&D budgeting: What I’ve learned in the last year running a small startup

Starting a small business when you’re in high school can be difficult and time-consuming. There’s always going to be some element of risk, especially when your product is a new invention altogether. Despite all the projections and estimates you plan for, you’ll never really know how well the product will sell until you’ve already sunk tons of R&D time and money into it. As someone who’s currently balancing high school with running a small startup focused on model rocketry electronics, I’ve learned a lot about budgeting both time and money in order to be as efficient as possible.

---

---

Budgeting: Time

Running a business, especially a startup, is very time-consuming. You’ll often be sat at your computer for hours a day, designing, ordering, and prototyping your products. It can be difficult for me to find time to put in hours a day given I’m still in high school, but here’s what I’ve learned from over a year of product development work for my small business:

---

• Weekends are your best friend. I’ve stopped seeing weekends as time to lay around and do nothing. I go into the weekend with a goal I’d like to achieve, and try as hard as I can to achieve it by the end of the weekend. I do work two jobs right now (not including this business), so there are certain weekends that I can put in more time than others.

---

• Make the most of your free time in school/work/etc. Everyone has probably experienced this before: you’re sitting in a class at school and you’re bored because you already understand the material and are just trying to make it to the end of the period. Instead of looking at this like a huge waste of time, get some work done during any free time you have! Study halls and free periods are also great. You have to be at school anyway, why not make the most of it?
• Burnout is real. Don’t try and work every hour of every day. While you may have to force yourself to work at certain times without motivation, it’s best to try and make the most progress when you have the most motivation to work. Motivation isn’t everything, obviously, but it helps.

Budgeting: Money

If you’re anything like me, you’ll try to get as much value as you can out of your dollar. It can be pretty demotivating when you make a mistake that costs you hundreds or thousands of dollars. And there are pitfalls you should look out for that can cost you – my recent blog post on PCB manufacturing has some good lessons here. You feel like you’ve just reached a huge setback. That’s why budgeting is so important – setbacks are inevitable but you can mitigate for them. Recovery from setbacks is a choice, and budgeting will help.

---

• Keep track of all your transactions. This is pretty basic. Just keep receipts and invoices for each purchase you make. This is absolutely a necessity, for both tax purposes and for keeping track of spending and run rate.
• Categorize your expenses. $100 spent on R&D should be kept separate from $100 spent on product inventory. This will help give you a better idea of where your money is going.

---

• This one is fairly obvious, but – when ordering made-to-order prototyping parts such as circuit boards or CNC milled pieces, TRIPLE-CHECK YOUR FILES!!! I’ve lost a good amount of money simply because I didn’t double check the file I uploaded right before purchasing.
• Figure out how many projects you have going at once, and ISOLATE each of them! This will help you understand which projects are really sucking your money and help you individually budget each project to figure out if they’re really worth pursuing.

---

Conclusion

Founding and growing a business is a daunting task. For me, it’s made even harder with balancing school as well as two jobs. Despite this, it is still very possible to balance time and money efficiently. If anything, I think this goes to show that things you never thought possible are within your reach, given enough time and budgeting, and given enough passion for your business mission. 

There is another way that you can benefit from this budgeting exercises – for example, putting this planning into practice will help me with my future! Knowing how to budget my time and money will give me an edge. At the end of the day, I don’t run Circuit Wizardry for the money. I do it for the experience and the satisfaction of knowing I make good products.

Until next time.