Small Business Budgets
A budget is an important aid that small business owners use to plan for a specified period of time and reveals what the business needs to make their business goals come to fruition. The advantages of having a budget provides a framework for the future, assists in cash flow management and assists in growing the small business. Below are some tips to help you understand having a small business budget.
A budget is normally done on an annual basis but can also be done in smaller increments of time such as monthly or quarterly.
Research is key when planning your first business budget. Previous business results are helpful in planning budgets. As well as research on trends and the current market your business is in.
A budget is best kept simple especially when just beginning to put the first one together.
Focus on revenue and expenses at high level and become granular as budgets become more of a norm for the business.
A budget only serves a great purpose if it is compared to actual results on a timely basis such as monthly.
Investigate discrepancies when comparing actuals to budgeted projections.
A budget is a tool and should be used as such to help in achieving your business goals. If after comparing results, you need to change your budget, do so. The purpose of a budget is not to create a stopping point but rather a guide towards business success.