Managing cash flow is one of the most challenging aspects of being a business owner. Without a thorough budget plan, it can be quite difficult to track and manage your finances. This is especially true for any unexpected business expenses that may come up, as they often do. If you want to keep your business operating in the black, you’ll need to account for both fixed and unplanned costs, and then create and stick to a solid budget. Below are tips for business owners to help develop a budget to keep their finances in order:
• Create a Realistic Cash Flow Projection: Be as realistic in your projections as possible. It’s better to underestimate your potential business income than to overestimate when it comes to budgeting.
• List Your Essential Expenses: These include wages, taxes, rent or mortgage payments on the business property, and operating expenses such as power, water, Internet and telephone bills.
• List Discretionary Business Expenses: When devising this list, determine which items you want, but could live without. If you can’t live without them, be sure to include them on this list!
• Reduce Debt Quickly: If you do take out a debt for your business, ensure you will be able to make the repayments every month, and factor those payments into your budget. To avoid incurring interest charges, think about how you can reduce your debt as quickly as possible.
• Constantly revisit your budget: Your budget will evolve along with your business, and you’ll need to keep adjusting it based on your growth and profit patterns. Be sure to revise your monthly and annual budgets regularly to maintain a clear, up-to-date picture of your business finances.
A successful business is one where both business profits and personal income for the business owner and founders continue to rise. Good budgeting techniques will help you achieve both. If you need help managing any aspect of your nonprofit’s or business’s finances, we want to hear from you. Call us at (301) 913-0008 or email firstname.lastname@example.org to make an appointment.