Budgeting can make or break your business. It truly is all about how you spend and save money. The more money you are able to make a save, compared to spend will result in a greater net profit, and money in your pocket as well as money for those want’s on your supply checklist. In this Building Up we are going to go through Small Business Budgeting 101.
Budgeting is important, especially in a small business. Estimating and matching expenses to revenue is important because it helps small business owners to determine whether they have enough money. It can help them discover if they have the money to fund operations, expand the business and generate income for themselves. Without a budget or a plan, a business runs the risk of spending more money than it is taking in or, not spending enough money to grow the business and compete.There are several things to consider when you make a budget. Along the way it will be linking to some free downloads I1 have created for you. Once again I made it nice and easy to read with your favourite thing, you guessed it, LISTS!
- Check Industry Standards. Not every business is the same, especially if their goals are different. If you find a business however that is similar to you, especially in goals and objectives, this is a great way to find out information of industry standards.
- Make a Spreadsheet. Or you could download mine. A spreadsheet will capture what money is coming and going, almost like a screenshot of your company. You should have one that really fits your needs. Personally I like to capture screen shots per month, so I can keep better track of spending habits.
- Factor in the Roller-coaster of Business. Business is a roller-coaster, there will be ups however you need to prepare for the falls. Income will not always be consistently growing, you may have a set back. Prices of your supplies will also vary.
- Over Estimate Spending. This one is probably my favorite tip. I always calculate for more money set aside to spend then what we actually do. It ensures you have enough money to pay for supplies and yet when you come back under-budget in the end, you get to put some of that money back into the business for larger purchases or a bonus as your pocket.
- Review Progress Often. Always take time on a regular basis to look at the numbers, whether it is once a week, or once every two weeks when you pay yourself and employees. Reviewing your progress will help you to notice when things are going good, and bad, and learn what causes those changes.
- Look into How to Cut Costs. Always look into ways to pay less for the expenses but get the quality you need. For us we purchase Stihl oil which makes the mixing process really easy and is way cheaper and safer for our equipment in the long run, will save us service charges on the equipment and money on oil. There is always a coupon, or a way to get a discount, whether it is buying in bulk, or always dealing with the same company, and as a compensation they will give you special promotions every so often.
There are several ways you can successfully budget.
- Use Software.
- Hire Outside Help.
- Use Excel, just start making a spreadsheet.
Overall there are many ways to help you budget. For myself I tend to keep receipts all in one place, and then once every two weeks I organize everything out, and check how my plan is going. It is always important to monitor when your money is ending up, because you don’t want to lose control of your expenses.
How do you budget? When do you set time to review?
- Or others if given credit. ↩