Why does my business need a budget?
First things first. Why do you even need a budget? Well having a budget is actually very important. It’s truly the core of your business! It allows you to keep a record of your business’s expenses. Budgeting helps keep you on track and allows you to make sure that there is enough money to support operations, potentially expand your business and determine if you’re generating enough income. Establishing a budget enables managers to map out spending so that it is less likely to overextend the company just as people budgeting their personal expenses lessens the likelihood of them overextending themselves.
Let’s take a second and think about this scenario for a second. Everyone has their own personal bank account. When you overspend, this adds to your expenses. But do you have the money to cover it? If there is no budget plan, you’re bound to set yourself up for failure by not having the needed funds. The same scenario applies to your business. The last thing you want is for your business to fail. So it’s not only important to create a budget but to be mindful of it as well. In other words, in order to succeed it’s vital to have a budget!
Developing a budget technique
Now, there are so many ways you can track your budget. If you were to go asking around how businesses keep track of their money, you’re going to get many different answers. Everyone’s process is different. Some companies make a spreadsheet to estimate what total dollar amounts and percentages of their revenue will go towards what. Expenses can vary anywhere from utilities, to payroll expenses, benefit payments, etc. One budgeting technique you can utilize is QuickBooks. It’s a great software to utilize.
Quickbooks tracks all of your expenses by category so that it’s easier to calculate actual expenses and compare your projected budget to actual spending. QuickBooks can be customized to fit the needs of your business. Also, don’t forget we live in a tech-savvy world. You can turn to an application for assistance. Aside from the many programs that are offered, in this day in age, there’s an app for pretty much everything. Consider the Mint app. Mint is a free app that documents your financial life all in one place. Allowing you to set goals, set a budget, and do more with your money.
What should be included in my budget?
Your business’s budget could include a range of different expenses. Expenses such as employee pay, employee benefits, advertisements, website software, etc. Budgets can be divided yearly but most businesses do quarterly budgets. Either way, keep a very close eye on changes that happen within each time span. It’s recommended to graph estimated spending and actual spending within your budget. Why? This will allow you to focus on each expenditure and determine why you are going over budget or why you are so far below budget.
You may want to make side notes about events that happen that may cause you to increase your spending. For example, maybe you won an award and you are taking the entire office to an award ceremony for which you have to purchase tickets. Those tickets weren’t initially in your budget so it would be understandable if you went over budget. Additionally, that side note will be a record of why you are over budget. If you begin to have numerous unexpected expenses, the next time you budget it may be best to include a significant amount of extra money in your budget to cover them. Overall, keeping note of changes helps you determine what contributed to your increase or decrease in expenditures.
Once you determine what differentiations made you exceed your budget, it’s time to think of ways you can decrease spending. In part two, we will discuss how staffing agencies help meet your budget! Stay tuned…
Regardless if you are right on a budget or you budgeted way under, remember no business is perfect, nor is anyone. Reflect on why you started your business in the first place and you will be able to focus on what is needed to run it and make it profitable. This is your commitment to yourself, your business, and your employees.
Isn’t it time that you took control of your budget? Contact us today to get help from an experienced staffing agency. We have an amazing Job Search page that makes it easy to both share and find open positions. You can learn more about our staffing services here.
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