When you own a business, the financial aspects of it help you establish security and help ensure you can accomplish the things you want your business to achieve. Let’s take a look at the why and how of budgeting for your business:
Creating a Business Budget: The Why
Budgeting is a part of life. We budget for new homes, we budget for raising children, and we budget for vacations. Why should your business be any different? A business is an investment of your time and money, and budgeting is the first step to ensuring that you are successful on both a daily basis and in the long run.
Business budgeting can:
- Help you minimize expenses
- Ensure you pay bills on time and keep you out of debt
- Help you afford what your business needs
- Increase profits
- Enable you to work fewer hours
- Prepare your business for the future
- Help you make better financial decisions
- Reveal leftover funds for reinvestment
Now let’s take a look at how to start budgeting for your business.
Creating a Business Budget: The How
Step 1: Examine Your Revenue – Finding all of your sources of income is the first step in budgeting for your business. Determine what money comes into your business on a daily, weekly, monthly, and/or yearly basis. Once all income streams have been totaled and you have analyzed past revenue, you can begin to notice trends and patterns to better prepare for the future.
Step 2: Calculate Your Fixed Costs – Next, add up all of the expenses that you can expect on a monthly and yearly basis. Fixed costs can include supplies, equipment, lease payments, taxes, insurance, payroll, debt repayment, insurance, utilities, and other expenses that you must pay throughout the year.
Step 3: Examine Variable Expenses – In addition to fixed costs, you likely have some variable expenses that are not as cut-and-dry and that may change throughout the year or only occur on a more random basis. These expenses can include replacing of equipment, training or professional development, marketing costs, your own salary, and more.
Your Resource for Business Coaching in Maryland
Want to know what’s next? Working with an experienced business coach can provide priceless benefits to your business. Growth Team Strategies wants to see you thrive and grow in your industry and will work with you to develop a solid budget for your business. Contact us today for more information on how we can help you grow your business in MD.