A good budget can mean the difference between success and failure. Not only does it let you manage your money in the most efficient way, it can also help pave the way for your future growth plans, let you monitor your performance and accurately predict what might lie ahead.
For small businesses, creating a budget can often be low down on a list of priorities. But it should be an essential part of any business, old or new. Here are our top tips for better budget planning.
We know the urge to forecast big numbers is high, but unless you’re working on what’s actually there, rather than what you wish was there, your budget will be as good as useless. Being as detailed as possible will help get a clearer picture for your budget – go back as far as five years, highlight all your fixed expenses as well as those one-off expenses. One of the areas you should overestimate is the unexpected costs – there are plenty of these over the lifespan of any business! It’s far better to overegg your outgoings than face a surprise bill you’ll struggle to pay.
Use the right tools for the job
Are you still poring over endless Excel spreadsheets or shuffling through a pile of paper receipts? Being able to have instant access to accurate numbers is a major boon when completing a budget for your small business. Accounting software like Quickbooks Online does all the important number-crunching for you and lets you see how your finances are looking in real-time. It allows you to pull up profit & loss sheets, reports and even forecasts based on past performance. Some advanced versions even have a dedicated budget feature.
Let your whole team check it over
While ultimately the buck stops with you, if you have a trusted team beneath you, let them check the figures over for themselves. They can point out obvious details you might have missed in their particular area or let you know whether you’re being too ambitious with your numbers.
It also helps your staff to keep track of any changes they might need to make in their day-to-day work lives in terms of targets or expenses to stick to. They will appreciate the transparency and it can turn out to be a valuable (if not slightly tedious) team exercise!
Regularly revisit your budget
Once you’ve got all the hard work out of the way, the budgeting fun doesn’t stop there. As your business (hopefully) grows, so, too, should your budget. Your incomings and outgoings will change, not only with time, but with seasonal demand. How often you revise your budget will depend on where you are with your business – new start-ups should be doing this monthly with more established businesses ideally quarterly.
Of course if you have neither the time nor the inclination to produce a detailed budget, you can always let our team of experts work their magic. Get in touch today to find out what we can do for you.