As with any business, there is an initial cost to starting up your practice. Many practices start off on a shoestring budget and make more substantive investments once the cash begins to flow in. But, you will need some cash or credit initially for the essentials, like malpractice insurance.
Make a list of the essentials versus non-essentials and the costs associated. Use that information to construct a budget – include initial and monthly costs through your first year. Thus, you’ll know what funds you need upfront and how much you need to make over the course of the year to cover expenses (and profit). Accompanying your budget should be revenue projections for the year. This may seem difficult upfront, but necessary to set goals for your practice and be realistic about expectations.
Budget and Financial Planning for the First Year (Rudnick & Armano)
FURTHER READING FROM OUR LENDING LIBRARY
Results-Oriented Financial Management: A Step by Step Guide to Law Firm Profitability (John G. Iezzi, American Bar Association)
How to Start & Build a Law Practice (Jay Foonberg, American Bar Association)
Flying Solo: A Survival Guide for the Solo and Small Firm Lawyer (K. William Gibson, American Bar Association)