Budgeting for Business?

Budgeting for Business?

You bet!

Money is finite, even in business, and so we have to plan for how it is spent. That’s really all a budget is–a plan for how best to utilize your money.

From there, a budget can be very simple or very complex. I highly recommend starting simple because otherwise you might get frustrated and give up.

So first things first:

Figure Your Income and Expenses

This will be fairly straightforward if you:

track your numbers

use good software

have a quality bookkeeper doing it for you. If you don’t, then this work needs to happen before anything else.

Plan Your Spending

Once you’ve got those numbers in hand, you get to decide how to spend your money! Of course, some of those decisions are made for you. Every business has operating costs of some kind and has to pay taxes somewhere along the way. Include those line items whether they are monthly or annually so you are not surprised when money comes due.

Remember to Save

A couple of important line items that you may not think about for business include

  • An emergency operating fund
  • Saving for future purchases

Those are ideals you often hear in relation to personal finances, but they are just as relevant for a business.

Pay Yourself

And finally, don’t forget your owner draw or paycheck, depending on your business type. Business owners often tend not to pay themselves, putting every other business want or need ahead of their own right to earn from their business. Your salary is a valid business expense and should be included in the cost of operating your business.

Improving Income

You might not realize it at first, but a budget can also help you improve your income. Working with a budget gets you in closer contact with your business finances, and this in turn helps you to take note of the ebb and flow of your income stream. From there you can create strategies to improve that flow and increase both your business volume and profitability!

A quality bookkeeper can help you design and maintain a business budget for your specific needs and goals.

Is Your Business Healthy?

Take This 60 Second Quiz to Find Out!

If you’re ready to budget your way to business success, contact Cooks Bookkeeping.

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