Budgets For Small Business
Running a business is no different than
running your personal finances. Think of it as another person, and keep it separate from your personal life. Creating budgets for small business is a great way to see where you are going, what type of profits or losses are happening and with a budget you can then make decisions on expansion or tightening of the financial belt! Even if your small business is sitting in your basement or at your kitchen table, it needs to run on its own, and therefore should have its own budget. This may sound boring especially if you have just started a business, and just want to jump right in and get creating or selling, but without this paperwork, your business could sink before you even get started. |
As a bookkeeper, I have seen perfectly good businesses be forced to close simply because no one was really watching that bottom line, or keeping up with tax installments and other government deductions. Which is a shame, as small business is responsible for a large percentage of employment now.
If you are running a small business or are thinking about operating one, then the first thing you need to do before you run out the door with business cards in hand, is to set up a business budget. This is almost like a business plan, but much simpler in the beginning.
Take a day and really think about the business you want to start, then armed with a pad of paper, and a pot of coffee, really sit down and figure out a typical day in your business and what you are going to need and how you will price your services or products.
Start with a list of equipment you may need and beside each one, put an approximate price for that equipment.
Make a list of supplies you will need to use on the above equipment, and how much it will cost.
If you are running this business from home, decide where you will do this. Try and avoid the kitchen table and other family areas if possible. So, you next list is things you need, such as a desk, file cabinet, paper, computer… and put a price beside each one.
After you have made this list of things needed to start your business, now you will need another list on just how you plan on getting the word out about your business, also known as Marketing!
Under this heading you will need to start asking yourself a few questions about the business.
Such as:
Will I need a simple website or one with ecommerce for sales?
Will I need a separate phone line?
Where will my market be?
Keep asking yourself questions. Try and imagine a typical work day and just what might come
up.
Once you have made your lists, then you can add up the costs beside each one, and if the total sends you running out of the room screaming, then relax and take a closer look. Could you lease equipment instead of using all your money up? Could you take over a closet in the house for your supplies instead of creating an office? Could you find some used items?
When creating budgets for small business, whether a micro mini one person show or a rented industrial unit in town, you still need to do this exercise. Figure out just how much you need to start this business, and just how
much it will need to run each month.
Once you have the startup budget worked out and then the operating budget worked out, you can then price your services and products accordingly. Open a separate bank account, try and resist running it through your household accounts, this way you know if you are making money or not.
Unless this is a non profit volunteer business, you are going to want to be paid for your efforts, so watch your
overheads and monthly budgets and you will be on top of your business.
If you are running a small business or are thinking about operating one, then the first thing you need to do before you run out the door with business cards in hand, is to set up a business budget. This is almost like a business plan, but much simpler in the beginning.
Take a day and really think about the business you want to start, then armed with a pad of paper, and a pot of coffee, really sit down and figure out a typical day in your business and what you are going to need and how you will price your services or products.
Start with a list of equipment you may need and beside each one, put an approximate price for that equipment.
Make a list of supplies you will need to use on the above equipment, and how much it will cost.
If you are running this business from home, decide where you will do this. Try and avoid the kitchen table and other family areas if possible. So, you next list is things you need, such as a desk, file cabinet, paper, computer… and put a price beside each one.
After you have made this list of things needed to start your business, now you will need another list on just how you plan on getting the word out about your business, also known as Marketing!
Under this heading you will need to start asking yourself a few questions about the business.
Such as:
Will I need a simple website or one with ecommerce for sales?
Will I need a separate phone line?
Where will my market be?
Keep asking yourself questions. Try and imagine a typical work day and just what might come
up.
Once you have made your lists, then you can add up the costs beside each one, and if the total sends you running out of the room screaming, then relax and take a closer look. Could you lease equipment instead of using all your money up? Could you take over a closet in the house for your supplies instead of creating an office? Could you find some used items?
When creating budgets for small business, whether a micro mini one person show or a rented industrial unit in town, you still need to do this exercise. Figure out just how much you need to start this business, and just how
much it will need to run each month.
Once you have the startup budget worked out and then the operating budget worked out, you can then price your services and products accordingly. Open a separate bank account, try and resist running it through your household accounts, this way you know if you are making money or not.
Unless this is a non profit volunteer business, you are going to want to be paid for your efforts, so watch your
overheads and monthly budgets and you will be on top of your business.
