Steps To Better Business Budget

For any small business, creating a good budget is important. With the right business budget – matching expense to revenue – you know how much money you have for important things like funding operations, expanding when you need to and generating income for yourself.

Here are some steps to follow to create your own better business budget.

1. Do Your Research

Small businesses are vulnerable and often at the mercy of industry downturns. So, do your research before launching a new one. Check the library and internet for information about your industry sector. Go to the IRS website to get some insight into what percentage of your revenue coming is probably going to be allocated for cost groupings.

2. Create a Spreadsheet

For your small business budget, it’s a good idea to create a spreadsheet to calculate which amount of your revenue will be allocated to costs, including raw materials, rent, taxes, insurance and so on.

3. Have Extra and Cut Costs When Necessary

Your estimated revenues and expenses are not set in stone, so it is wise to have extra cash socked away before expanding or hiring new staff.

If time is tight and money must be found to meet payroll, pay a debt, start a necessary marketing campaign. Or, to take advantage of a good small business opportunity, it’s a good idea to start cost cutting, rather than going (further) into debt.

Cost cutting could include downsizing your workforce, reducing pay, switching to a less costly worker health insurance program, relocating to a smaller office space, lowering monthly bills, switching your hours of service and restructuring debt.

4. Review Your Small Business Periodically

It’s not enough to have a yearly budget. Reviews should be done more often. Many business owners find that they can only accurately plan a month or two ahead, because their industry is so volatile and unexpected expenses can derail the best-laid plans.

5. Don’t Be Afraid to Shop Around

You should regularly review the list of suppliers and services your small business uses. Are the suppliers performing as promised and are there better-priced alternatives around?

Serving clients in Broken Arrow and Tulsa, Shockley Bookkeeping provides each client with accurate, efficient, and quality information to make sure their books are ready at year-end. We are trained and experienced in using Intuit’s industry-leading software solution QuickBooks and QuickBooks Online – a good solution for any small business looking for accounting help.

Contact us today for a free quote and more information about how we can help your small business with its budgeting needs.