Here are some tips that have helped me budget for my business.
Tip 1: Set Monthly Income Goals
When creating a budget, one of the first things I like to do is set a monthly income goal.
This way, you can ensure that you are allocating enough money to meet your business goals.
Not meeting your earning goals? Share more of your budget for sales or marketing!
Tip 2: Set Monthly Spending Goals
You should also set monthly spending goals based on your budget.
This means setting a budget that you can spend on purchases, advertising, and other things without going over budget.
When I ran my organization, we allocated a portion to OPEX (operating expenses). From there, we created different “buckets” for ownership, taxes, profits and marketing.
Tip 3: Analyze Weaknesses
When managing your budget, it’s important to analyze your weaknesses.
Are there any costs that are higher than they should be? Are you spending too much money on advertising?
These questions can help you identify problems and make the necessary changes to keep your business running smoothly.
Tip 4: Make Monthly Forecasts in the First Month
I recommend reading every month on the first day of the month.
This helps you to anticipate any expenses or changes in income and make better decisions about next month’s budget.
Helpful Hint: You should create a spreadsheet with two columns each month. Part A should be your budget, and part B should be your actual budget. From there, review your budget at the end of the month!
Tip 5: Factor in Seasonality/Industry Trends
When creating your budget, it’s a good idea to consider the weather and industry trends.
For example, if you have a business that has seasonal tops and barrels, then you should factor that into your budget.
The same goes for any corporate event. If your interest rate drops, adjust your balance accordingly.
Tip 6: Keep Your Personal & Business Accounts Together
Your money should not be mixed with your business. Keep separate accounts!
Having two separate accounts will help you keep track of your spending on both sides and avoid any confusion.
Tip 7: Choose a Fixed Budget Tool
Finally, choose a budgeting tool to help you stay organized and on top of things.
There are many options, from cloud-based tools to spreadsheets. Choose the accounting software that works best for you and your business.
For budgeting, we usually use Quickbooks (because it’s cheap and easy to use) but many other programs work.
Tip 8: Be Careful With Money
When estimating your monthly income, be careful about your expectations.
Don’t compare yourself to the amount you will earn this month. It’s easy to get carried away and spend more than you’re getting in.
If you are careful, you can ensure that you always stay within budget and achieve your goals.
Tip 9: Prepare for Business Growth
Finally, always plan for growth.
This doesn’t mean you have to make big investments or take risks; it just means that you have to be ready to expand when the opportunity arises.
Monitor company activity and adjust your budget accordingly.
This way, you can ensure that your business grows without putting too much strain on the budget.