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Creating a budget for your small business is a must, but where to start? It can be hard to make a budget and stick to it, especially if your small business is just starting out. You want to create a budget plan that will help make the most of your dollar, maximize output, and grow your business. The task can feel overwhelming, but GadellNet has a few tips to help you out.
1. Look at what others are doing
No, not every budget will work for you small business, but if you look at other budgets in your industry to see what similar sized companies are doing, it can help you get an idea of what you can do to make your budget. This research will give you an idea of the common costs and the common revenue of a business like yours.
2. Break down expenses and revenue
You may have goals for revenue but be realistic with your estimated average revenue. You can start with a monthly revenue estimate or a yearly revenue estimate. Make sure your expenses cover everything you will be spending on including supplies, technology and how hiring. Try to leave no stone unturned when it comes to listing expenses- really break it down. This will give you an idea of what you need to do to make it happen.
3. Expense and Profit Margins
Make sure you have that little extra saved up in case something happens. By overshooting monthly burn, you will be playing it safe. Make sure you are going to be covered if something unexpected comes up.
4. Vendor Price Comparison
See the pricing for vendors you will need. Ask them questions that will help you understand the costs in different situations. If you need a rush order- what does that process look like? Before you actually spend money with any of these vendors, take a look around and see the price ranges.
5. Spreadsheet tools
Make sure you are organized. The traditional spreadsheet can help you keep track of making a budget, but tracking tools will work even better. Look around for the best software that will help you create and manage your budget. Taking this step will take your from theory to action when it comes to your budget.
6. Make Adjustments
If you make adjustments regularly, you are much more likely to have a solid grasp on the money flow in your business. Trends change and so will your business needs and expenses. Take a hard look once a month or quarter. When adjusting your budget add in operational changes and issues that have come up.
7. Hire outside help
There are some tasks you can do on your own that you think might save you money but outsourcing some of these tasks might free up a big chunk of your time which could be more valuable. Hiring help with your budget isn’t a bad idea either. A professional with small business experience might be able to help you navigate some of the common budgeting issues.
8. Be creative
No one has an unlimited budget. We all have to make sacrifices when it comes to where the money will go. Take care of the necessities then get creative. Find ways to save and stretch your budget without spreading yourself thin. If you have a brick and mortar location, maybe you close early on certain days or have employees all work from home one day a month (employee skip day?). This could help save a little on overhead and that money can be allocated to other expenses.
9. Have a written business plan
Having a written business plan is great for a number of reasons. When it comes to your budget, this is a perfect tool to show people exactly what you need, what your priorities are, and maybe even remind yourself of these details from time to time. A business plan will help you prioritize you budget because this shows where you want your business to go. Keep focus and direction with this resource.
10. Keep the benefits in mind
Planning and budgeting are never going to be the most glamorous part of your small business. The benefits to doing these task are huge however, so when you go to buckle down and get this knocked out, remember through this activity you will be able to control your finances, ensure you can continue to fund your current commitments, enable you to make confident financial decisions and meet your objectives and of course make sure you have enough money for the future projects you want to take on.
GadellNet is an award-winning IT consulting firm that provides full-service technology solutions to small businesses. Since 2003, we have been delivering efficient, profitable and happier workforces. GadellNet’s best-in-class engineering team is highly successful at implementing and maintaining value-add hardware and software technology.