Budgeting Essentials

Helping you master the practical essentials of Budgeting, Cash Flow, Accounting and Debt Relief.
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5 Ways a budget benefits an Entrepreneurial Business.

When you are running an entrepreneurial business, you want to take advantage of every tool that will help your business.  A budget is one of those tools that you want to make sure you use.    Learn more in this week’s blog.

While a budget may not be the first thing you think of when someone mentions business tools, it is a tool that every business owner should be using. Your business benefits in a number of ways from using a budget.  Today I discuss 5 of them.

1. Helps you see when you are "off plan"

You can be making money, but still be off plan. Using your budget to do monthly budget to actual comparisons helps you see where you are off plan.  Doing this allows you to look at the situation and determine if you need to make adjustments. Looking at this comparison helps you maximize your profits by keeping your plan in front of you. 

2. Helps you see when you have obligations due.

Depending upon your business, there are a number of different items that you will need to pay.  Many of those bills get paid monthly, but some get paid with a different frequency.   Using a budget will help you see when those regular payments that don’t have monthly frequencies are due and help you avoid being short on cash to pay them.

3. Helps prevent "spending creep".

Spending creep can happen to anyone. As your expenses increase in small increments, it is easy to lose track of what spending level you want to be at. It only takes a couple increments before your spending is at a level that is higher than you want it to be. 

Overspending negatively affects your bottom line.  Using your budget helps you see when this situation arises.  Then you can make corrections before it becomes a BIG problem.  Without a budget, you don’t have a good baseline to compare your expenses against.  This makes it harder to be diligent about staying on top of your finances.

4. Helps you put more of your hard earned money into your pocket.

Just like spending creep affects your bottom line, no budget affects what you could be doing with your finances.  Without a budget, you don’t have a measuring tool that helps you produce the best financial version of your company.  You can make money, but it is unlikely you will hit marks that you haven’t thought out and written down. 

Your budget helps keep you accountable for making a profit.  Maintaing this profit helps you to determine where your spending has the potential to impact or hurt your planned profit. 

5. Helps you set and achieve goals.

Preparing your budget provides the perfect opportunity to look at your numbers as a whole before you begin the year.  This allows you to spot trends and research potential areas that can save you money.  Use your budget to help you set your annual goals.

As the year progresses, using your budget to watch your spending helps you achieve the goals that you set at the beginning of the year.

 

Budgets are more than a tool for your accountant.  Using your budget efficiently enables you to create and achieve your goals.

Sign up for my weekly blog which provides you with weekly tips for preparing a good budget for your business.

To learn more about cash flow and budgeting, sign up for my upcoming free online Cash Flow Workshop HERE.  I will email you when the next workshop is scheduled to begin as well as sending you a link to each new weekly post in the Budgeting Essentials Blog! I will be teaching my Cash Flow Workshop soon, so don’t miss it!

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God Bless your week!

Copyright

© 2019 Dan Heiland 2019 Kat Heil, LLC

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