Budgeting as a small business owner can be a bit tricky, or for lack of better terms—absolutely confusing! The main objective is to have more money coming in than you have going out, but of course there’s so much more to it than that. With various expenses such as business payments, payroll, stocking and inventory fees – budgeting at times may seem near to impossible.
We’re presenting 4 tips for budgeting as a small business owner and ensuring you don’t drown in business debt along your journey of entrepreneurship. Check them out below:
Budgeting As a Small Business Owner
- Know Your Numbers – Excel is going to be your new BFF, so learn to love it! The first step to budgeting as a small business owner is to know your numbers inside and out. Start by collecting all of your expenses – insurance, inventory, supplies, etc., and all of your expected payments from customers, clients and partners.
2. Be Prepared for the Unexpected – Now start thinking through everything that could crop up: good, like a company doubling their monthly order, or bad, like an unexpected tax bill or the loss of your key employee. You don’t need a contingency plan for every single one, but you should have it on your radar so you’re prepared to hit the ground running when unexpected surprises hit.
3. Control Your Cash Flow – Take that spreadsheet from tip #1 and start projecting what your cash flow might look like over time. Take into account things like seasonal fluctuations based on holidays or vacations so that you know when you need to stockpile money and when you have a buffer to invest in the growth of your business.
4. Keep Your Business and Personal Finances Separate – Even if you are a sole proprietor, you should separate your business and personal finances whenever possible to make things a little easier come tax time!
Being a small business owner is no easy feat, but don’t allow fear to prevent you from mastering your finances and taking total financial control over your business. These four tips on how to budget as a small business owner should help no matter what stage your business is at.
