Advice for Your Small Business Budget

A lot of people get really intimidated when they hear the word ‘budget’ and are drawn to images of confinement and restriction.  As a small business owner in today’s world there is nothing that will derail you faster than mis managing your budget.  Creating a budget is top priority to manage your cash flow properly.  Without proper money tracking your expenditures will out run your income and you will be buying a ‘Sorry We’re Closed’ sign as your final purchase.

It should be fairly self explanatory that in order to gain a profit you need to intake more than you are spending, or at least the business model needs to be set up in a way that allows you to get there as fast as possible.  To turn an actual profit you have two basic options, you can earn more or spend less.  While increasing income is always the number one priority, decreasing expenses is by far the easiest.

There are many ways to cut expenses; you can change your advertising model away from traditional media and towards more community oriented promotional items like, lanyards or coffee mugs, even a Frisbee give-a-way at a local 10k can get your message out there at a much cheaper rate.  Granted your business has to be suited to the promotional item, but it can be done.

There are a few things most common to small business owners that take their budget and throw it out the window.   These are the things your business can live without, but your think you need right now.  For example, does a windshield repair company really need gps tracking in all their vehicles to track when, where and how long their repair guys are out on the job?  The answer is no, unless they have allocated proper funds and can afford it, but its even then not essential to the success of the business.

Having an adviser help you make these determinations will be an excellent resource, but most books on small business will advise the same thing, you need to trade time for money until the business is successfully up and running, then you can take a more managerial role.  If the choice is between calculating the excel sheet on your own, or buying a $5,000 software program – you may need to consider the effort it will take to calculate on your own for a while until he business becomes viable,  If you make ill advised purchases now, the money will run out before your core business model even has a chance to produce income for you.

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