Small Business Budgeting

Every organization big

months pouring over the budget, Analysiing variance, updated forcasts .. But what about small businesses? They should budget too? Sure. If you do not prepare a budget you have nothing to aim. The budget will support the business plan and control the cost finally succeeded

. Budget

What? Although you may not know it, you prepare a budget each time you estimate how much you will have cash left end of the month after paying your bills

.

budget is a forecast of all cash, cash. It was held in the same format as a financial report, and most commonly include a period of 12 months. At the end of this year, anticipated revenue and development expenditures in the budget compared the actual performance of the business stated in the financial statements

The budget process has some The first step I would suggest that the profit and loss forecasts.

This involves a monthly profit last year and the financial statements and budget figures tease for the next months / years in a spreadsheet. For example, if your sales in February 2010 € 70k, but you know you have a new sales and better product this year you will have the budget to € 100K

If your phone bill € 1k you were last March, and you have changed suppliers and negotiated discounts, you can lower this amount. Its extremely important to be realistic with the numbers. If not, the entire budgeting process is a waste of time

Once you extrapolate the monthly profit and loss numbers, you now have the basis of your budget. Remember that your budget is a continuous process.

Theres no point in preparing a budget and sticking it in a drawer in years. You need to constantly measure your results against budget figures and forecasts you catch small problems before they become a problem.

Here are our tips to make the budgeting for your small business

1. Updated monthly budget and your analysis of variance. If you have your budget set up correctly in a spreadsheet should be a simple case of plugging in numbers.
2. Set up a simple system for your budget. If it takes too much time, you will not do it. `
3. Building a cash reserve. The budget will help you control costs and cash flow. In times of economic uncertainty a reserve of cash will help you sleep at night
4. Conservative. Expect a sales increase of 40% in a month for no reason apparently will not end well. If you constantly lose your target, you will become deflated
5. Be flexible. If one of your numbers is an example you buy new equiptment with no plan, you can find production has increased matcth 6. Accept that the budget is an estimate form and nature, it will never be perfect.
7. Do not be stingy about spending so much importance that drives sales, for example, marketing or sales commissions

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