If you own a small business, the end of the year may not be all sugar plums and lollipops if you’re not planning properly for 2019.
Financial tension is an experience that a lot of small businesses go through, mostly in the first few years of their inception. You must have heard about the housing collapse in America – the outcome of continued disregard for budget planning. In the same way as personal finances need management, your small business too requires budgeting.
Setting a budget is even more important when you run a small business in the midst of stiff competition, and your revenues keep on fluctuating. So, have you set a budget yet? Maybe you haven’t. 2019 is just around the corner so you need to start now if you haven’t already!
Many small businesses, entrepreneurs and startups don’t create a budget either because they lack the knowledge to do so or they falsely believe that it’s a waste of their time. This is regrettable, for having a formal budgeting process in place is key to making an appropriate use of the resources required to propel business growth. Not having a budget simply means you have skipped strategic planning, and are only shooting in the dark.
If your small business hasn’t set a budget yet, given below are some important reasons to help you learn why you should.
Focused Goals: When you set a budget for your small business, you are always aware of your current available capital, expense expectations and revenues. You have it all in black and white. This, in turn, helps you focus on your business goals. In fact, it helps each employee in your company clearly understand what you’re planning to achieve.
TIP: Turn traditional budgeting upside down. Make”Profit the First Line of Expense”. Once you’ve set your revenue goals for the new year, why not set your profit goal first under your revenue line? What is left is what you have to run the business. Don’t let profit be “whatever is left over”!
Adaptability: Revenues and expenses are never constant. Since setting a budget enables you to keep a tab on these elements, you’re always ready to positively react to sudden changes in your business.
Better Decisions: Your budget is like a robot, which is ready to answer some crucial questions pertaining to your business. Whenever you plan to hire new talents or improve the quality of your services, all you need to do is ask your budget and you’ll get the answer. Strategy requires funding and budgeting ensures where exactly you need to spend money so that you can support the strategy for growing your business.
Controlled Spending: Having a budget is also beneficial because it keeps your overall spending in line. Un-allocated spending is out. You have a crystal-clear picture of your spending capacity.
Future Success: The growth of a business depends on its capability to reinvest into its resources. Budget planning is of huge advantage because it gives you greater control over the profit margin. You can budget for a profit margin and expand the presence of your small business.
Budgeting is the backbone of a business growth plan. If you want to make the best use of your financial resources and put your business on a pedestal, you should start setting a budget for your small business today. Don’t worry if you can’t handle it on your own. Look for and hire an expert business consultant or a reputable financial management company, and they’ll do the budget planning for your small business in a professional manner.
If you’d like help in preparing your budget for the next year, visit and contact us hereto book a free 30-minute consultation. Find out how economical it is to get professional help in putting together your small business budget.