For small businesses, every dollar counts. But if you’re not careful, it can be easy to let your expenses get away from you.
The savviest small business owners know the value of being pennywise, and a cleverly managed budget is at the core of that.
Money sense isn’t always second nature, though, so we’ve compiled six small business budgeting tips to help you stay on track.
1. Tally Your Income Sources
The first thing you need to get a gauge on when building your budget is how much money your business is bringing in each month and where it’s coming from.
Understanding these figures will help you allocate your expenses more accurately and more predictably on a month-over-month basis.
2. Understand Your Expenses
Next, make sure you’ve got a gauge on all of your expenses, including:
- Fixed costs: Consistent recurring costs like leases, utilities, and insurance
- Variable costs: Expenses that may fluctuate, like transportation costs, contractor wages, and supplies
- One-time expenses: Items or services you only need to purchase once, such as equipment or relocation
Once you’ve got a handle on your expenses, make sure you’re evaluating them regularly in search of ways to cut back.
While it’s usually easiest to make impactful reductions in your variable costs, you can also reduce fixed costs by seeking better deals or finding more flexible office solutions for your business.
3. Get Familiar with Your Taxes
When you’re employed by someone else, taxes are taken at-source. But as a business owner, the onus is on you to pay what you owe, when you owe it, with no mistakes.
And this isn’t always a simple task.
Taxes vary by state, so make sure you do your diligence. It may also be wise to connect with a bookkeeper if you’ve got questions about how it all works.
4. Don’t Just Guess At It
The worst thing you can do is try to track a budget in your mind. It’s hopeless. You need a formalized budget tracker, whether it’s something as simple as a spreadsheet or more involved like Mint or Quicken.
You can also find some great, turnkey budget templates online, including:
- The Balance: A clear, simple table template that lists every budget item, the budgeted amount, the actual amount, and the difference between the two.
- Google Sheets: Tons of easy-to-use templates that translate your figures into clear tables and charts on a concise, visual summary page.
- Smartsheet: Multiple detailed resources for small businesses, including 12-month budget spreadsheets, department budget templates, projection templates, project-by-project templates, and startup templates.
5. Base Your Budgets in Reality
It’s all too easy to base your budgets on best-case-scenario projects. But this is a mistake. You’re better off building conservative budgets to ensure you’re not over-extending. That way, if things go better than expected, you’re at a surplus of cash rather than finding yourself suddenly strapped.
6. Reinvest in Your Business
One of the best things you can do is allocate some of your budget each month to reinvest in your business.
This could be things like courses, learning opportunities, and seminars that help you become a stronger entrepreneur, marketing and advertising initiatives that help generate more awareness of and revenue for your business, innovation and product development–whatever it takes to help make your business operate at a higher level.
The power of a great budget is no joke. Taking control of your finances can help you take your business to the next level. The key is to make sure you’re being diligent and covering all your bases.
If you’d like to learn more about how a flexible workspace like The Post can also help you level-up your business and get the most out of your workdays, get in touch with us today. Our team is available to speak with you.