Why is it important for your business to have a budget?
All businesses large or small needs a budget, regardless of how much revenue each brings in you need a financial plan for your business.
A budget is the best tool you can use to outline clearly what your business revenues and expenditures are for a period of time, this can be done quarterly or yearly whichever is preferred.
Once revenue and expenditures are established you can make goals for what you want to achieve for your business. These can be things like, Revenue gains Cutting expenditure cost Upgrading your business equipment Staffing levels All these are impacted on how well balanced your finances are which can be determined by your budget with regular tracking and importing up to date data from your cash flow. START PLANNING YOUR BUDGET NOW - See these three steps below to get you started. DECIDE YOUR BUDGET & PLAN Decide what you are wanting to achieve for your business and prepare your budget from there. i.e: Financial growth you will look at all aspect of your business operations cost and revenues, this would be a financial or operating budget. Staffing levels means you may just need to evaluate your cash flow income to determine which days and time your business makes the most revenue which you would do a cash flow budget. ANALYSE & BALANCE First separate out all your income and expenses, this will give you the overall picture of your businesses profit and loss. From here you can analyse the value of your business assets, cash in the bank and other revenue against further expenses which still need to be paid out from your business. i.e: Taxes or business loans. This will tell you what your business is worth and help balance your finances accurately.
REVIEW & TRACK Ensure your budget is kept up to date by reviewing your budget regularly. With doing this it will enable you to make changes where necessary and when different circumstances arise. Think about tracking your budget, you can do this month by month or yearly against previous year's budget. This will give you clear guidance to how your business is performing to achieve your goals and keep on top.