29 June 2022
Entrepreneurs begin their operation with a wave of optimism and enthusiasm but without a well planned budget they find it is not possible to create a successful action plan.
When running your business it’s easy to get distracted with day to day problems and miss the bigger picture. Successful entrepreneurs allocate time to create and manage budgets, prepare and review business plans and regularly monitor their financial status and business performance.
Budgeting identifies current available capital, provides an estimate of expenses and anticipates incoming revenue. By referring to the budget you are able to measure performance against expenditure and ensure that funding are available for initiatives that support business growth and development.
It will enable you to concentrate on cash flow, reducing costs, improving profits and increasing returns on investment.
Budgeting is the basis for all business success!
It helps with both planning and control of the finances of the business. If there is no control over spending, planning is futile and if there is no planning there are no business objectives to achieve.
A budget is set up to:
1) Control the finances of the business
2) Ensure that your business can fund its current commitments
3) Enable your business to meet its objectives and make confident financial decisions; and
4) Make sure that your business has money for upcoming projects.
Never underestimate the benefits of budgeting:
1) Budgeting estimates revenue, plans expenditure and restricts any spending that is not part of the plan!
2) Budgeting ensures that money is allocated to the things that support the strategic objectives of the business
3) A well planned budget helps everyone understand the priorities of the business
The process of creating a budget provides opportunities to include your staff, resulting in them sharing your business vision; and engaging the team in reviewing and comparing the budget with actuals can provide information that highlights the strengths and weaknesses of the business.
If you’re running your business without a proper budget you may find you’re actually just running around in circles and not meeting your long-term goals. By taking the time to set up a budget, you will free up time in the future and give yourself the best chance of achieving the rewards you want for your hard work!
To Your Success,