Tweet

Budgeting Made Simple for the Small Business Entrepreneur

Guest post by: Linda Siniscal

Article Overview: An article of 665 words offering tips on creating a budget and the important role finances play in your small business

Budgeting Made Simple for the Small Business Entrepreneur

Most of us came from the corporate world where working with budgets was an everyday occurrence. So now you are the one in charge and budgeting is the last thing on your mind for your business. Budgeting is just as important to the small business owner as it is to major corporations. It helps control those ebbs and flows that most small businesses experience throughout the year. Creating a budget doesn't have to be hard or complicated, you can make it a simple process by utilizing your financial software. For example, QuickBooks allows you to draft a budget based on your prior year's profit & loss report. Once the budget is created, review your income and expenses and make any needed adjustments based on your business plan for the new year. Now when you run your monthly financial reports, you will be able to monitor your monthly budget against your actual numbers allowing you to quickly analyze those items with large budget variations.

If your accounting records are a mess then the figures you use will most likely be inaccurate. How can you successfully run a business without knowing where you are financially? The beginning of the year is the perfect time to start keeping good accounting records. If bookkeeping is just something you hate to do, hire a virtual bookkeeper and let them get you set up in QuickBooks. By keeping your accounting records up to date, you will be able to see how employee or contractor time is spent on a particular job, where you are on project costs and what your bottom line is. This information will also assist you when preparing your next bid or proposal - you certainly don't want to be consistently losing money with each project. If you do, you will not be in business for very long.

If you don't have goals for your business or a way to measure your progress, your business will not grow and most likely get worse each year.

Some easy steps to get started:

1. If this is your first budget, don't worry about getting it 100% right. Your budget is a work in progress and can be adjusted throughout the year.

2. Use your financial software such as QuickBooks and Peachtree to help draft your budget.

3. Review your profit & loss reports for the last 2 years and make any needed revisions to your budget. Is there perhaps a new service or product you will be offering this year? Use your sales goals and work from there in creating your budget. Don't forget to include the costs involved for the new product or service.

If you do not have these measurement tools in place, your business will continually run at a loss and soon out of business.

Remember your budgeting is another way of goal setting - if you are behind in sales, step up your marketing efforts and cut back on those unnecessary expenses until you are back on track. The budget should reflect the direction you envision for your company.

By having a budget, the business owner can use the extra money gained to purchase needed products or supplies, to market and promote the business, and when there is a decline in sales, the monthly budget will prevent the business from failing because the owner knew to cut back on certain expenditures.

Related Articles
  Zero Based Budgeting in Managerial Accounting
  How Your Budget Can Help You During The Tough Financial Times
  Zero Budgeting for a Home Business
  3 Tips Every Female Entrepreneur Should Know About Business Budgeting
  Personal Finance Budgeting
  The Secret to Less Anxiety over Business Cash Flow
  Preparing an Accurate Marketing Budget
  Don't Think Too "Small"
  Why Budget?- The First Step to Wealth Management and Financial Freedom
  Home Based Business – How Budgeting Will Increase Your Efforts
  Baby-U-Deserve-Getting-Every-Thing (Budget)
  Marketing Mythology Putting Lipstick on a Pig
  Has Your Business Budget Crossed a Line?
  Eight Key Budgeting Tips
  Flexi-budget - Planning for uncertain times
  The Top Business Best Practice
  Budgeting for publicity and keeping within limits
  Personal finance software helps get rid of overspending syndrome
  Achieving Your Goals through the Wealth Management Strategy
  SMEs - different types of entrepreneurs

Article Tags: accounting, Budget, expenditures, finance, small business



Related Forum Posts
Re: Budgeting Approach - Budgeting plays a vital role in any business. I totally agree with Ringo what he said and how they had planned to invest and continue with their business. The information you share over here is nice peter. Small entrepreneur will get a great help from your provided information.
My entry - 1. The Best Business Books Ever: The 100 Most Influential Business Books You'll Never Have Time to Read - this is a fascinating book about the history of Business theory, and I'd recommend it to anybody. 2. The Big Book of Small Business: You Don't Have to Run Your Business by the Seat of Your Pants, by Tom Gegax. Ditto. 3. PADI: The Business of Diving Book Okay, so this book won't be of use to anyone who doesn't want to start a scuba store, but I did, and this book was of course invaluable to me in reaching that goal.
Re: Budgeting Approach - [quote="baconmarius":252nopeg]Budgeting plays a vital role in any business. I totally agree with Ringo what he said and how they had planned to invest and continue with their business. The information you share over here is nice peter. Small entrepreneur will get a great help from your provided information.[/quote:252nopeg] Good points. Also, there's no successful business without a settled budget for this and that so you really have to mange the money inside the pocket, the assets/investments as well as the liquid ones so you'll always have something to grab the moment you need it the most.
These maybe the coldest franchises out there: - Here are the worst 15 performing franchises in regards to having the highest Small Business Administration (SBA) loan failure rates. The list is dotted with sub sandwich shops, fitness centers and car shops. WORST FRANCHISE LOAN FAILURES Failure % 1 OBEE'S SOUP SALAD SUBS 55.56% 2 LADY OF AMERICA 41.94% 3 COUNTRY CLUTTER (BED & BREAKFAST) 41.18% 4 COPY CLUB 36.36% 5 ALL TUNE AND LUBE 35.71% 6 PICKERMAN'S 35.71% 7 PHILLY CONNECTION 35.59% 8 ROLY POLY ROLLED SANDWICHES 34.78% 9 COTTMAN TRANSMISSION 34.48% 10 HAIR COLOR EXPRESS 33.33% 11 LEE MYLES AUTOMOTIVE TRANSMISSIONS 33.33% 12 GODFATHER'S PIZZA 33.33% 13 SMOOTHIE FACTORY 33.33% 14 BLIMPIE 31.39% 15 GOLF U.S.A. (RETAIL GOLF EQUIP.) 30.77% Source: Small Business Administration, SBA Loan Performance Within Franchise Code for the Period of FY 2001 - 2005
Exclusive: Interview with Results - Hi Forum Members, I'm helping start up a Business Coaching and Consulting company here in Toronto, Ontario, Canada (a Subsidiary of RSC Business in Los Angeles). As a Research and Development Intern I am required to practice my listening and interview skills by surveying Small and Medium Businesses on thier Business. This Survey is designed by RSC Business to also assist the Business being interviewed more insight into their own business. I am looking to interview about 30 businesses across North America over the span of 3 months. At the end of these interviews I will be publishing a report of the results and they will be made available for free to the Interviewees. The Report data will include responses from a minimum of 100 interviews. I would like to extend this opportunity to members of the Forum. If you would like to have this short 20-30 minute interview conducted on your Business and you reside in North America please send me an email or PM. Please contact me at andy[at]jvprosperity[dot]com to arrange our interview and to get free access to the results when they are published.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

What Is The Foundation for Your Vision?

How do I finance a franchise?

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.