One of the biggest things that can put someone out of business is failing to properly budget. In a city like Atlanta, setting up a business can seem entirely too expensive. However, business in the big city doesn’t have to have a big budget if you know how to plan. So, we’ve put together 10 tips for proper budgeting.
10 budgeting tips for businesses
1. Do some research
Just as there are with business plans, there are tons of resources on the internet to show you sample business budgets. Search for these types of budgets or the actual budgets of other companies in your industry to get an idea of how you’ll need to spend your money. Of course, you’ll need to customize your budget based on location, specific inventory or practices, etc. But those resources are a great place to start.
2. Learn what the average spending is for your industry
You’ll need to know exactly what you need for your business and your industry. So, when you look at the sample budgets you’ve found, list the things that you know for a fact you’ll need to account for. Make note of the things you need to buy right away and what you can save for later.
3. Make sure everyone is on the same page
Your team, especially your management team, should be on the same page when understanding where your money is going and why. Be as specific as possible when explaining the budget and answer any questions that arise. It can help bring up specifics that you forgot to address and help everyone abide by the master plan long-term.
4. Create a budgeting team
Similarly, it may help to have a team specifically for budgeting and accounting. Hire and partner with the people in your company who are good at numbers and money and all that fun stuff. Knowing that you don’t have to do it alone can help you think more clearly and get great advice from people with more experience. Make sure your budgeting team knows the specifics of your business too so that you plan a budget that fits your business, not just a generic outline.
5. Be realistic
It’s easy to get lost in big dreams about starting and growing your business. It’s also easy to buy or hire more than you need. So, make sure that you’re growing steadily and budgeting within your means. Use past data and make data-driven projections to make your budget, not just estimates.
Additionally, being realistic means being prepared for disaster. So, when things are good, make sure you’re saving some of those profits for when the going gets rough.
6. Know that it’s okay to adjust
You probably don’t have the financial needs that you needed 2 or 5 years ago, so you shouldn’t expect your business to either. If you’ve been in business for a while and you haven’t revised your budget based on your current needs, it may be time to review and adjust the way you need to.
7. Shift accordingly
If you do need to shift your budget to different places, understand that you only have a certain amount of money. So, if you have to move money to one department or one resource, then you have to take it from something else. Everything about your business has to be about balance and flexibility. So, don’t be afraid of the changes you may have to make!
8. Be organized
Not being specific with your goals and where you put your funds can be a recipe for disaster. It’s okay to assign your budget generally, but then break it down to bite-sized pieces. If you have a budget for your Marketing department: How much will you dedicate to salaries? How much will you devote to materials? What amount will it take to build your brand? How much will you spend each month on supplies? Will you dedicate money to travel? Think about all of the little details that go into one large section before you plan for another.
Additionally, make a system to keep track of where your funds go. Whether it’s software, file cabinets, or something else, make a system to keep up with receipts, expense reports, etc. Designate a specific time to review your expenses. Don’t let things pile up during the year to cause a headache later. Create a quarterly or even a monthly schedule to go over your reports and adjust if needed.
9. Use the software that’s best for you
There are tons of budgeting software options. Many people use Quickbooks to balance their business budget, but that may not be the best system for you. Electronic systems are the best way to keep everything organized, searchable, and in one place. However, the most popular type of software used may not be the one that works for you. Do your research, schedule demos of different products, and learn which software would work best for how you operate on a daily basis.
10. Don’t forget insurance
One of the most important expenses you may have as a company can be business insurance. You’ll need to consider what types of coverage you need generally and for your specific business. Take note of your local laws for coverage, and how high of a coverage limit you’ll need for something catastrophic. Consider what would happen if your business shut down and you couldn’t pay rent. How much money would it take to replace your inventory after a storm? What would happen if a customer sued you because you unintentionally gave the wrong advice? These are some of the questions you would need to ask yourself or that your agent would ask you to get the right business insurance.
We understand that, as a business owner, you have a lot on your plate. That’s why our insurance experts take a bit of your time to get to know your business and its specific risks to get the best quotes at the best rates for you. To start getting customized business quotes, just give us a call, fill out our online form, or LiveChat with a specialist today!