A budget is a good idea for any business. I have been struggling with following a budget in my business and have been getting scammed by what I thought was a legitimate company.
Many small business owners are not so great with budgets because they haven’t been properly taught how to make one.
I’m going to be sharing in this post how you can make a full-proof budget for your business, in order to avoid being scammed, and avoid running into financial trouble in the future.
This Free Opinion IST will provide tips to make a full-proof budget :
1) Start by calculating all of your current monthly expenses that you need.
Such as rent or mortgage payment, utilities bills, transportation expenses (car payments), food costs (for both yourself and your employees), clothing costs for yourself, etc. (this is important).
2) Take your Gross Income and subtract all of your monthly expenses.
Make sure that the calculation is accurate, and check with a calculator if needed, before you get carried away. Gross Income = Monthly Expenses – Monthly Bills
3) Take out a certain amount of money each month for savings.
For things such as business emergencies and to pay back cash advances for your cash flow.
Use cash advances only when necessary to pay your bills on time, so save up some extra so you don’t get stuck in bad financial situations.
You can use one or two months of this saved amount to pay off any credit card balances you may have.
4) If you have money left over after your savings.
You can use it to reinvest back into your business for marketing purposes.
5) Calculate how much you need aside from your monthly expenses.
That should be aside for taxes. You don’t want to get caught in a bad financial situation over tax infractions, so save up some extra by putting aside a certain amount of money each month for this purpose.
6) Calculate the minimum amount of money you need aside for unexpected circumstances.
Such as a natural disaster or a major equipment breakdown or health issues.
Having an extra safety net is always a good idea especially if it saves you from any bad situations in the future.
7) Track your progress
Make adjustments as needed.This budgeting process should always be done on a monthly basis.
8) Stick with your budget and never go over the intended limits.
You do not want to get into financial trouble by spending too much money in one month, leaving you broke the next month and not making payments on your bills when they are due, which can lead to credit issues down the road.
9) Have a look at your yearly income and expenses.
If you made a few less dollars last year, then you should adjust your expenses to reflect that.
This will help you get a better idea of where your income is coming from and how much money you can spend.
You should always have enough money aside for taxes each month by using the markets wisely with investing in stocks for extra passive income.
If you won’t have enough after taxes, then head over to our blog post on banks , banks are very important with bank accounts .
10) Once you have followed this budgeting process for two months.
Take the liberty to add in any additional expense such as insurance or extra monthly expenses such as car payments if necessary to pay for car repairs or car maintenance, etc.
11) Compare this budgeting process to last year’s income and expenses .
To see if there are any changes in your overall financial situation. If you are able to make more money or spend less in certain areas, then you should do so if necessary to make the overall budgeting process better.
If your income decreased, then you need to adjust your expenses accordingly unless it is an unexpected event, in which case you simply adjust your monthly expenses accordingly to reflect that.
12) Take your income each month and calculate what is your total net worth.
This net worth, or assets minus debts, is an important factor for any business owner to understand.
This will help you determine whether you are doing well or not.
The more money you have left over each month after your monthly expenses are paid will translate to a stronger overall position in your overall business where your business has sufficient funds to continue operating without being overly stressed out about money issues.