You’ve cut back on Thai takeout, stuck with public transportation, and opted for DIY home improvement projects. You’re a personal budgeting wiz.
But for businesses? Budgeting requires a little more preparation and finesse. When starting a new company (or even revising your current one), you need a plan that fosters profit and growth.
To get started, let’s dive into a few budgeting basics for all businesses.
#1: Review Your Spending
To create a budget for the future, you must first investigate the past.
Alright, enough guru-talk. If you want to tighten up the balance sheet, you need to determine what’s draining your profits. Once you start probing your records, you’ll probably find a decent amount of wasteful spending.
Start by listing all fixed costs for your business, such as:
- Rent and necessary utilities
- Software services
Next, determine any variable expenses, like:
- Usage-based utilities
- Salary bonuses or commission
- Employee expenses
- Marketing costs
Once you have an idea of necessary costs vs. overspending, you can create expense policies designed for maximum business growth. And don’t forget—factor in some cushion room for any possible new costs in the future.
#2: Track (And Expand) Your Revenue
Like peanut butter and jelly, revenue and spending go hand-in-hand. To create a profitable budget, you also need to track, predict, and grow all income sources.
And don’t be afraid to get creative! Revenue doesn’t just include your direct sales. Here are a few ways to expand your business’s income:
- Investment interest — Want to boost your revenue without lifting a finger? Consider investing in a mutual fund or business brokerage account. For maximum success, you’ll want financial advisor services that can provide high-quality investment tools, like a broker dealer network.
- Dividends – Stock sales aren’t just open to individuals. As an LLC, your business can also buy market shares. Research companies that share dividend profits with shareholders to increase revenue.
- Advertising or sponsorship – Networking is a form of currency. If you know any friendly neighboring or related businesses, ask about constructing a marketing deal. Your company sponsorship will only foster goodwill and profits.
#3: Ask for Professional Help
We can all be a little prideful when it comes to our work. But when it comes to a business budget? There’s no room for ego-driven mistakes.
An accountant or CPA firm can transform your budget from passable to profitable. To get the most out of their expertise, come prepared. The more detailed records you can provide, the greater accounting assistance you’ll receive.
And if a personal accountant is out of the question, consider accounting software. Platforms like Freshbooks can help track all business expenses and invoices with ease.
#4: Become Friends with Software
Human employees are the backbone of a business. However, that doesn’t mean that technology is your enemy.
Beyond online accounting, there are tons of automated software services to keep your budget on track. Consider adding one of these useful platforms to your business:
- Payroll software – Salary tracking software will help you stick to your payroll budget (and treat your employees fairly). With automated payments and digital records, you can stay on top of any pay discrepancies or raises.
- Budget template services – If you’re a visual learner, a well-organized spreadsheet can do wonders for budget tracking. A quality template will categorize all of your costs, income, and cash flow for maximum clarity.
- Expense trackers – Little costs like gas, food, and travel can add up fast. And paper receipts are bothersome and outdated. For easy tracking, look into expense reporting tools that can digitize physical receipts and create uncomplicated summaries.
For a Business Boost, Build Your Budget
The beauty of budgets? They’re flexible. Whether deep in the red or raking in profits, every business could use a budget check. Start with these basics, and you can build a solid spending plan for the coming year.