A small business is a big step for any individual. There are a lot of expenses, and it can be very stressful at times. Your budget is a very large part of your success. The budget helps you calculate how much your business is profiting over time. Many small businesses do not succeed due to the lack of budgeting.
Remember your budget is a priority. It is not something that you can do when you have time. It should be a necessity. Before doing anything else with your business, sit down and figure your expenses and your income. It is not a difficult process, unless you make it that way.
Start your budget as simple as possible. I would not recommend starting with an elaborate budget, that you will be unable to read or understand. You want to be able to look at it, and immediately see what needs to be reduced, or changed to increase your profit margin.
Compare your budget monthly. This will give you a chance to make adjustments to your expenses. For instance, if your utilities are continuously higher than budgeted, increase your budget. You could also try and discover ways to decrease you utility bill. Remember money you do not spend is profit. You have more of a chance to decrease your expenses if you are paying close attention to your budget.
Be prepared to miss your budget goal. You are not perfect, all companies miss there budget at one time or another. Don’t let it discourage you. Make adjustments where needs be, and push to achieve your budgeting goal the following month.
You should also watch your revenue daily, or weekly. Notice any decreases, and make changes to your expenses accordingly. If you follow this process, it will be possible for you to catch any loss of profit before it actually occurs.
Track all money involved with your business. There is no exception to this rule. You should know exactly where every penny is coming from or going to. Keep receipts to everything. This will also help you during tax time. It will be much easier to receive all of your deductions if you have receipts.
A small business budget is very important to it’s success. It will provide you a way to compare increases and decreases. It will also help you determine the areas that you should work on to increase your profit. You will start to notice trends in you revenue, and be able to see what
happened to increase them.
Things you should track in your budget:
Fixtures & Renovation
Printing & Copying
Advertising & promotion
Licenses & permits
Auto & transportation
Legal, accounting, consulting fees
These items may vary depending on your business. It is just a simple guide