How to Manage Your Business's Budget
/Owning a small business is full of challenges, one of them is managing the financial side of things. It can become overwhelming trying to figure out how to delegate money for different expenses, plan your spending, and make a profit. That said, it doesn’t have to be a daunting task and you shouldn’t let it deter you from trying, especially because there are so many resources at hand.
To help you get a handle on your business’s finances, I will lay out some key tips for managing your business’s budget—one of the most important aspects of fiscal well-being. But before we dive into creating and effectively managing your business budget, here are some resources that might be of help for getting your finances in order:
Cetera: Get access to financial managers and the latest technology to run your business’s finances smoothly.
Budgeting template: Use this budgeting template as a general layout. You can customize it as you need to match your business’s finances.
Kickstarter: This fundraising platform can help you come up with the capital to launch new products or services.
Small business checking account set up: Creating a separate account for your business is essential so you can keep finances separate and accounted for.
Invoice software: This will help you keep track of what customers owe you and make it easier to collect payments.
Now let’s dive into the budgeting process:
#1: Figure out how much money you have coming in
The first aspect of your budget should be your business’s revenue (income generated from the sale of products or services). This will give you a foundation for how much you actually have on-hand to spend.
#2: List out your expenses
Next, list out your business’s expenses. Start with your fixed expenses (those that occur on a monthly basis and are relatively the same cost—or close to it). Fixed expenses usually include things like rent, utilities, and essential services required to keep your business running. Other expenses like tax payments, irregular maintenance, and big purchases should also be factored in.
#3: Compare these numbers against each other
By subtracting your expenses from your income, you can determine how much working capital your business has. This value can help you determine how much you have to spend or invest in equipment, products, and other aspects of your business.
Keep in mind that you should always have money in your business’s savings for emergencies.
#4: Expand your knowledge
Now that you have a budget, you know where your business stands financially. However, in order to take your budget management to the next level, you need to invest some time (and possibly money) into learning about business financial management. This could be as simple as doing research, joining the Money-Makers circle and reading blogs or even enrolling in online courses. The better understanding you have of financial concepts, the more capable you will be of successfully managing your budget.
#5: Review your budget on a consistent basis
Closely tracking your spending and income is important to maintain an accurate budget. As your business grows, you will likely need to make regular adjustments to accommodate the changes in your business’s spending, expenses, and forecasted needs.
A weekly review will help you stay on top of your financial well-being and prevent big oversights from slipping under the radar.
About Money & Mimosas: Money & Mimosas was started as a passion project by Danetha. A former NFL cheerleader turned entrepreneur, she started blogging as a way to combine all of her passions into a career. Money & Mimosas is now enjoyed by readers in over fifty countries with the same dream of achieving financial freedom without living frugally.
