I know this is not often a topic most business owners want to talk about, but for those who are not number savvy, this post is for you. (Trust me, I needed this myself not too long ago!) For many of us, budgeting may not come naturally. It is not the easiest item on our agenda but could be argued to be one of the most important ones!
Here is the thing, as a small business owner, you should be aware of your budget and spending habits at all times. Finding that balance is not always easy, but you will benefit significantly when you know your numbers.
The simplest definition of a budget is "telling your money where to go.
~ Tsh Oxenreider, Organized Simplicity: The Clutter-Free Approach to Intentional Living
I also want to add that a budget is not just the numbers. It is a glimpse of the vision and future goals of your business. Budgets require planning and as a business owner you need to know what future revenue and expenses you have coming your way. So, what does the planning process look like if you are budgeting for the first time?
Step 1: Start-Up Costs
You begin with your start-up costs by asking yourself, what will it look like to actually start your business? A brick-and-mortar business will have different costs than an online business. And a service based business vs. product-based will also have different budgeting needs. You can use a calculating tool like the Entrepreneur’s Start Cost Calculator to get an idea of what you can expect.
Step 2: Day-to-Day Operations
This is where you consider your recurring operating expenses. This could be office supplies, online marketing, tools, a Graphic Designer and/or Virtual Assistant like myself, website hosting, and more. Looking at what you are already paying for each month will help you grasp what is in your budget and what should be put on the wish list. Sometimes we get caught up in all the shiny objects when in reality, we need to consider what will help our business grow to the next level.
Step 3: Estimating Income
This is one area you want to be super careful about as it can be tricky. Do not, I repeat, do not overestimate your revenue. It is very easy and a common mistake to overestimate when in reality, you need to keep this very practical. Use facts and take into consideration seasonality. When you are estimating your income, focus on listing any recurring contracts first into a spreadsheet. Next, list out your services and pricing. Add in your estimated amount of clients for each service. As you fill out your spreadsheet, you should be able to mess with the numbers in order to get to your desired income amount for the year.
Once you have your estimated profit for the year, minus your revenue from your costs in order to get your profit number. If you find that it is not what you are looking for, focus on ways to either increase your revenue or decrease your costs. I am here to help you save you money! And by hiring a virtual assistant, this will not only help you with the organizational side of your business but your budget too as you’ll be back to doing what you love in no time!
Your budget is a glimpse of the vision and future goals of your business.
While it can be intimidating, it is better to start now and stay on track for the rest of the year! It is your roadmap for your financial success and I’m thankful I could be part of this journey with you.
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