When your goal is to successfully build and sustain a small business, you’ll want to take advantage of every opportunity to get ahead. While these opportunities do show up along the way, many of them are based on good, solid preparation on the front end.
So it is with creating a budget for your small business. If you can develop some good budgeting habits early on, you’ll find that you can avoid obstacles and score small victories when you need them most.
Here are a few budgeting tips for small business owners:
Set Realistic Projections
It’s always a challenge to accurately project how much your business will bring in on a monthly, quarterly or annual basis. It’s best to estimate your market potential conservatively for the first few years of your business. You’re better off underestimating your business income and then be surprised if it’s better than you planned rather than overestimating and feeling stress when numbers are low.
Do Some Research
You may find that it’s worth it to take the time to learn the standards for your specific industry. Start by finding out what the common costs and revenues are for a business like yours. Do your own research through online resources or the IRS. Don’t hesitate to ask questions, especially to other small business owners who run a business similar to yours.
Use Helpful Tools
There’s no reason to re-invent the wheel when it comes to creating and maintaining a budget for your business. Use the many tools and resources that are available to small businesses these days. You’ll find that there are some great programs out there that can help you track taxes, manage inventory and issue paychecks. Many of these are free of charge, but still powerful and easy to use.
As you become busy with the many day-to-day tasks of running your business, keeping an eye on the budget can be a challenge. Set calendar reminders, alarms…whatever it takes to be sure you are reviewing your budget on a regular basis. Costs and expenditures can add up quickly if you’re not paying attention. By keeping an eye on these costs, you will be more aware of cost-cutting changes you need to make.
It often takes the incurring of some debt to get a business up and running the way it should be. While small business debt may be unavoidable, do your best to reduce it as quickly as possible. The bottom line is, debt costs your business when it comes to interest. If you do decide to go into debt for your business, be sure you can make the payments and then work to get rid of them as quickly as possible.
The team at Hacker Accounting has been working with small businesses and independent contractors for many years providing financial needs and services. Find out what we can do for your small business by giving us a call at 602-375-5251.