Perfecting Your Business Budget

Perfecting Your Business Budget

How do you approach your business budget? Is it something you drag your feet on? Or do you see it as a vital tool for effectively running your business and reaching new goals?

I’m hoping your answer aligns with the latter of those two ideas, yet most of my clients start out feeling like their business budget is a problem they’d rather not think about.

Luckily, budgeting is a skill you can master with a little bit of time and attention. Let me show you how!

Business Budgeting 101

First, it’s important to note that your budget is just one piece of the financial equation for your business. Altogether it would be best if you had each of the following in place in your comprehensive business planning:

  1. Budget
  2. Cashflow forecast
  3. Monthly management accounts
  4. Financial statements (income statements and balance sheets)

Often, these aren’t the most exciting aspects of your business. However, they are essential to your success, and I guarantee having these pieces in place will lead to fewer nights lying awake at night, worrying over your business finances.

But, let’s get back to budgets. A reasonable budget will include:

  • Your profit target
  • Annual increases
  • Commissions
  • Allowance for an increase in expenses

One of the main issues that my clients have with budgeting has to do with their mindset. Begin shifting how you think about your budget with the following three suggestions.

Start Your Budget with the End in Mind

When guiding a client to craft their business budget, I encourage them to begin with their ideal outcomes. Enter salaries and expenses as you’d like to see them in the future—even if you know that that’s not where you are now.

Once you have your budgeted goals, take some time to look at past budgets to see where changes could be made. Now you are on your way to reaching your business goals!

Don’t Set It and Forget It

Wouldn’t it be great if you could set your budget and magically, your expenses, income and everything else just falls into place? Unfortunately, that’s not how budgeting works.

Your budget should be a living document. It needs to be easily accessible and something you look at often.

I encourage my clients to revisit their budgets regularly. This helps to ensure that you are ready and able to pivot your budget plan as needed.

Profit Breakevens

Your profit breakeven is where your business income covers all of its expenses and you can begin to see a profit.

Conduct a breakeven analysis, and be sure to include your expected and budgeted profit. I encourage my clients to add these extra steps because the truth is, we are all toiling away at building our businesses because we want to make a profit. Don’t let that portion of your goal go unaccounted for — if you don’t budget for a profit, you will never see one.

Accelerate Your Growth with A Well-Planned Budget

You started a business because you are a visionary — a passionate dreamer striving to make the world a better place. No matter what we do in life, there will be pieces we love and those we could do without.

Don’t let your business flop because budgeting isn’t one of your (many!) strengths. As an experienced business coach, I’m passionate about helping your business reach its full potential. Together we will start working all of the kinks out of your budget so you can contact your goals!

About the author, Sheles Wallace

Sheles is an award-winning business coach who gets results for her clients.

For over 15 years, she has helped business owners achieve their goals and

take their businesses to the next level. If you're ready to take the next

step in your business evolution and go from an owner who wears all hats to

creating a commercial, profitable enterprise that runs without you, find out

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