Keeping Your Small Business on Track: Sticking to a Budget

Creating a balanced budget for your business may seem overwhelming, especially if it is something you’d like to do on your own with no outside help. Here are some tips that you can use to get started.

Identify Your Income Sources

Of course, any good business budgets have a good grasp on how much money is coming in monthly. A good starting place is your sales figures and then going further by adding other income sources. Your income sources can include: hourly earnings, product sales, investment income, loans, savings, and any other income you may have coming in.

Determine Fixed Costs

Fixed costs are your expenses that stay the same each month. Examples of fixed costs are: rent/mortgage, utilities, salaries, internet, government and state taxes, cell phone, website hosting, accounting services, legal services and insurance. Although some of these costs may fluctuate from month to month, you know that these are costs that occur monthly and you can plan for them.

Include Variable Expenses

These are items that don’t have a fixed price tag. These purchases are able to be scaled up and down depending on your monthly profit. This profit is determined each month after paying your costs. The earnings you’re left with help pay for these variable expenses. Variable expenses can include: raw materials, contractor wages, commissions, advertising, transportation, travel and events, and printing services. The money you spend on these will not be fixed, but as your profit increases, you are able to spend more on these items, in turn, growing your business more quickly.

Predict One Time Spends

Setting a budget now can give you an eye into the future. You will want to have money set aside for unexpected expenditures like replacing a crashed laptop. There are some expenses you might like to budget for in advance, like a business retreat or a trade show you’ve been dying to attend or take part in. One time spends might be: computer, furniture, software, office supplies an gifts.

Creating a business budget may seem overwhelming and time-consuming, but taking the time now gives you the ability to make conscientious financial decisions so your business can stay on track and keep growing. Contact Carolina Money Minders for more help with your small business!