Stay in Control of Your Company’s Budget – Tips from a Business Plan Expert
Why aren’t more companies using budgets to help them meet their goals? Because many entrepreneurs feel that the effort required to create workable budgets is overwhelming. That’s why we asked one of our business plan experts for some tips to help you become a better budgeter.
6 Effective Budgeting Tips from a Business Plan Expert
Overestimate typical expenses
If you’ve been in business for any length of time, you’ll know that unexpected costs always come up. Sure, learning how to budget can be time consuming. But it’s better than simply hoping the numbers will just work out!
For any small business owner, failure to anticipate expenses can be disastrous. To avoid this problem, it’s important to overestimate any expenses. That way you’ll have extra funds available to shield your budding company from risk!
Establish your risk areas
Speaking of risk, it’s important that you consider both the long- and short-term possibilities for your company. This is the best way to accurately plan for your financial future. Take into consideration some of these questions:
- Will you need seasonal workers?
- Does your physical location often experience natural disasters (tornado, earthquake, hurricane, flooding)?
- Would changes in minimum wage or employee health care requirements impact your ability to hire employees?
Of course, there are other risks to consider as well. A business plan expert can help you establish a clearer picture for insurance needs, productivity, and emergency planning. All these can affect your budget in the long and short term.
Once you’ve established your risks, list guaranteed expenses and income for each month. Then you’ll know exactly how much you can set aside to help mitigate the impact should any of these situations arise.
Hire a professional
This tip may seem like nothing but a way to eat up more of your budget. But believe me, a professional will save you more by helping you avoid common pitfalls and money traps.
A good accountant will handle your tax worries, whereas a business plan expert can handle the administrative side of developing your company’s structure and budget.
To find sound professional advice, talk to other small business owners in your area.
Ask them who they use. Look for accounting firms that have experience in particular issues you’re interested in. For example, if you plan to expand your business to sell internationally, look for a business plan expert or accountant that has experience in that area.
If you’re operating on a limited budget, there are always free online tools for accounting and budgeting!
Revise, revise, revise
Your business is constantly growing, changing, and evolving, so will your budget. As you get to know the cycles of your profit patterns – maybe you’re busier around the holidays, or over the summer – you can adjust your budget.
Plan ahead to accommodate those slow seasons and fluctuating costs of operation. The longer you’re in business, the easier this will become as you can identify patterns in your monthly and annual budgets.
The more you revise, the clearer the big picture will become.
Track your sales cycle.
I mentioned cycles above, but let’s get more specific. You probably already know that most businesses go through slow and busy periods, depending on what products and services they offer.
If you sell custom snowsuits, you probably don’t do a ton of business during the summer! By the same token, air conditioning repair services aren’t doing brisk business in January (although this depends on geographical location too).
Make sure your budget has reserves for those slower times. When you have a reserve, there’s no need to be concerned if you aren’t racking up the sales numbers. Instead, use your downtime to jumpstart marketing efforts. All that free time will be well spent figuring out ways to reach your customers in creative new ways.
Get your employees in on the game
Yes, you’re the business owner, but that doesn’t mean all the budgeting pressure is on your shoulders. Your budget impacts everyone in your company, so involve them! Your management team may have ideas you haven’t thought of or special insight you lack.
Start by sitting down with your team to scrutinize your numbers. Let them know about any changes that may affect them or they way they do their work. By keeping your employees updated on long and short-term financial goals, they can help you reach them.
Need help getting started? Contact a Business Plan Expert at Bargain Business Plan today!
It’s a fact! Budgeting is the most effective way to consistently avoid expensive surprises and meet profit goals. Wouldn’t you like to stop scrambling to handle every financial crisis? At Bargain Business Plan, we help you invest your resources to your business’s advantage.
For more advice on planning your business budget, visit our website or contact us for a free consultation.