Small Business Budgeting Tips

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More business bang for your buck

Maintaining a small business and creating an environment that enables it to prosper can be a rather daunting task. Managing cash flow is one of the biggest challenges faced by many small business owners. The best way to overcome this obstacle and give your business the head start that it deserves is by creating an effective ongoing business budget.

Why is Budgeting Important?

Although many small business owners have a budget in place, most don’t know how to effectively maximise this resource. A successful budget begins by identifying profit margins, allowing you to wisely allocate expenses to where they are needed most.

Matching expenses to revenue (both real and anticipated) places financial security in your hands. A regularly revised budget aids owners in determining whether they have the money to grow their business, fund operations and generate income for themselves.

Let’s discuss some professional tips that will help you plan and reap the rewards of your small business budget.

Make a Spreadsheet

The first step to achieving the most out of your budget is identifying the total amount and percentage of your revenue that will be allocated towards raw materials and other essential expenses.

Marketing is an important aspect of any budget, so it’s recommended to set this expense as a percentage of your sales. There are multiple free-networking platforms and affordable pay-for-performance options available if the cash flow is tight.

Outline and Understand your Risks

There’s no doubt that every business venture has a certain degree of risk attached – risk that has the potential to financially impact your company.

Outlining and understanding the possible long- and short-term risks can help you accurately plan for your financial future.

Explore Flexible Office Solutions

Businesses are dynamic, meaning that their needs constantly change as they go through different periods of growth. With this in mind, when it comes to office space it’s important to identify solutions that work for you.

Growth Space specialises in flexible office solutions, providing short lease options that cater to growing small businesses. This means you no longer have to be backed into a corner, signing long-term leases on space that your company will likely outgrow.

Contact Growth Space to enquire about availability.

Recognise your Sales Cycle

Many businesses experience busy and slow periods during the course of the year. Being able to predict and recognise your “off-season” will make it easier for you to better account for expenses during this time.

Overestimate Expenses

It’s important to remember that your estimated revenue and expenses are not set in stone. Due to this, it’s a good idea to always round up when it comes to business budgeting. This will play a vital role in lessening the financial blow when you are forced to overspend.

Review your Budget Periodically

Due to the volatile nature of running a small business, it’s important to constantly revisit your budget. As your company grows and evolves, so too should your budget.

At Growth Space, we strive to provide our tenants with business environments that encourage growth and success.

Visit our blog for more information.