July 26, 2022 - Small Business Coach

If you’re a small business owner, then you know that budgeting is key to your success. Without a budget, it’s easy to overspend and find yourself in the “I need emergency money” kind of financial trouble. In this blog post, we will discuss some tips and tricks for creating a business budget that works for your small business.

Any new small-business owner will quickly learn that there are a lot of things they have to do that they have never done before. One of these is creating a business budget. This can be an intimidating task, especially for those who are just starting out. Where do you find the right financial information? How do you put all the data together in the right order? And what is all this business finance terminology anyway?

It can be enough to scare some people away from starting a business at all. In fact, one study suggests that most small-business owners don’t even have a budget when they first start out. However, the process of creating a business budget doesn’t have to be difficult if you approach it in the right way. By taking some time to understand the basics of business finance, you can develop a budget that will help your business succeed.

Small Business Budgeting in the US

Small businesses are the backbone of the US economy, accounting for more than half of all private-sector employment. Yet, despite their vital role, small businesses often have a difficult time surviving and thriving. One of the biggest challenges they face is budgeting.

According to a recent survey, only 42% of small businesses use a formal budget. This can be a major problem, as businesses that don’t budget are more likely to make impulse purchases, overspend on unnecessary costs, and ultimately fail.

The good news is that there are a number of resources available to help small businesses with their budgeting. The Small Business Administration, for example, offers free online courses on financial management. There are also numerous software programs designed specifically for small business budgeting. With a little bit of effort, any small business can develop a sound budget and put themselves on the path to success.

Why You Need a Business Budget

One of the most important things a business budget does is help you track your progress. This information can be invaluable in helping you make decisions about where to allocate your resources. A budget also forces you to think about your long-term goals and how you can achieve them. Without a budget, it’s easy to get caught up in the day-to-day expenses of running a business and lose sight of your overall objectives.

A 7-Step Guide on How to Create a Small Business Budget

Now that we’ve discussed the importance of a business budget, let’s talk about how to create one. Follow these seven steps and you’ll be on your way to developing a budget that works for your small business.

Step One: Know Your Business Finances

The first step in creating a budget is understanding your current financial situation. This means knowing how much money you have coming in and going out each month. You can find this information by looking at your past bank statements and credit card bills. If you don’t have this information readily available, you can contact your bank or accountant to get it.

Step Two: Determine Your Business Goals

The next step is to determine your business goals. What do you want to achieve in the short-term and long-term? Be specific about what you want to accomplish and when you want to achieve it. This will help you develop a budget that is focused on achieving your goals.

Step Three: Identify Your Revenue Streams

Now that you know your financial situation and have set your goals, it’s time to identify your revenue streams. This is the money that comes into your business from sales, investments, and other sources. Make a list of all the ways you generate income and estimate how much money you bring in each month.

Step Four: Calculate Your Expenses

The fourth step is to calculate your expenses. This includes both your fixed expenses, like rent and utilities, and your variable expenses, like marketing and inventory. Once you have a good understanding of your monthly expenses, you can start to develop a budget.

Step Five: Develop a Business Budget System

The fifth step is to develop a budgeting system. Once you have a clear picture of your income and expenses, it’s time to develop a budgeting system. There are many different ways to do this, so find one that works for you. You can use a spreadsheet, budgeting software, or even a simple piece of paper. The important thing is to find a system that is easy to use and understand.

For example, if you’re using a spreadsheet, be sure to include columns for each month and categories for your income and expenses. This will help you track your progress and see where you can make adjustments. If you’re using budgeting software, look for features that will help you stay on track, such as alerts when you reach your spending limit.

And if you’re using a paper budget, be sure to keep it in a place where you’ll see it often, such as on the refrigerator door. By taking the time to develop a budgeting system that works for you, you’ll be well on your way to achieving financial success.

Step Six: Track Your Progress

The sixth step is to track your progress. This means monitoring your income and expenses on a regular basis. This will help you see where your money is going and make sure you are on track to meet your budget goals. By tracking your progress, you will be able to identify any areas where you are overspending or not meeting your income goals. Additionally, this step will help you develop a more accurate picture of your financial situation. As a result, you will be able to make better-informed decisions about your finances.

Step Seven: Make Adjustments with your Business Budget

The final step in creating a business budget is to make adjustments. As your business grows and changes, so will your income and expenses. Be prepared to adjust your budget accordingly. This may mean setting aside more money for marketing or hiring additional staff. Whatever the case may be, be sure to keep a close eye on your budget and make changes as needed. If you need to accelerate your cash flow, invoice factoring (or other alternative funding solutions) can help. By following these seven steps, you’ll be well on your way to creating a successful business budget.

In Conclusion

By following these seven steps, you can develop a budget that works for your small business. A budget is an important tool for tracking your progress and ensuring you are on track to meet your goals. By understanding your financial situation and knowing your revenue streams, you can create a budget that will help you achieve success.

Remote small business work has seen a huge influx over the last few years. It was already on the rise, but the COVID-19 pandemic forced many businesses to change the way they operate. Now, as we enter a post-pandemic society, many companies are sticking with remote environments. They offer more flexibility, are typically cheaper to run, and have a global talent pool.

Running a remote small business can also help to improve employee morale. About 77% of remote workers say they are happier and more productive working from home rather than coming into an office space with distractions.

However, running a small business in person is often difficult enough. Then, you combine managing the ins and outs of your company from a remote location with keeping track of employees from different locations. You’re likely to have some speed bumps along the way, but the results are worth the effort.

Let’s cover some of the best tips you can implement to run your remote business successfully.

Starting With the Right Space for your Remote Small Business

If you’re running a business, you have to make your remote working space a priority. Having a home office has many benefits. You can be flexible with your time, you’re likely to be more comfortable, and you can decorate in a way that works for you.

Having a designated space for yourself is essential when it comes to running a business. Your office design needs to be practical and functional so you can stay productive without feeling burnt out.

When you have a separate office space, you’re more likely to strike a healthy work-life balance. This can help both your business and your overall well-being. Once you have an office space in your home, the next step is to build a healthy working routine around it, including things like:

Starting work at the same time each day;
Taking frequent breaks;
Making a to-do list for the most important tasks;
Letting family members who live with you know your working hours;
Stopping at a certain point every day.

You’re in a leadership position, and you should take that into consideration every time you sit down to work each day. Encourage your employees to have dedicated office spaces of their own or places they can go to work effectively and efficiently without distractions.

By setting an example with your own home office — especially if you frequently hold virtual meetings or video chats — those who work for you are more likely to follow suit. If you want to take things one step further, implement policies that naturally encourage productivity and stress reduction. Encourage employees to take breaks. Discourage working after hours. The more you embrace the flexibility and potential productivity of a remote lifestyle, the better.

Protecting Your Information in Your Remote Small Business

One of the reasons why remote work is becoming a permanent fixture is due to the ever-changing advancements in technology. Without these advancements, it wouldn’t be possible to keep your employees connected and ensure everyone stays on the same page.

However, there are some potential risks and drawbacks that come with that kind of technology. For starters, cyber attacks are on the rise and can pose a huge threat to small businesses. You might not have the budget for a highly-advanced cybersecurity system. There are still things you can do to keep yourself, your employees, and your business’ data safe.

The most important thing is to educate yourself and your staff. The more you understand cyber threats and how attacks work, the more vigilant you can be. Provide training for your employees and create a cybersecurity plan that allows everyone to take precautions and know exactly how to protect their information. Your plan should include:

Creating strong passwords;
Securing your Wi-Fi network;
Using a firewall;
Investing in antivirus software;

Backing up data;
Using cloud-based security.

It’s also worthwhile to hire an IT professional that can help your business if a data breach or cyber attack does occur. Nowadays, many IT pros work in the gig economy. You can hire a trusted professional as needed rather than keeping someone on the payroll.

Even though most of your work is done online, it’s just as important to protect hard copies of data that you might be storing in your home office. Keep those sensitive documents safe by utilizing a local shredding service. Leave no trace of important data anywhere, so you can ensure it never ends up in the wrong hands.

Keeping Your Employees Connected and Content

There are many mental health benefits to working remotely. Studies have shown it can help reduce stress and improve concentration and focus. However, the potential drawback is a lack of interaction and support.

When everyone is working in an office setting, there’s regular conversation and communication throughout the day. It’s easy to tell your employees they’re doing a good job or recognize them for their hard work. That isn’t always the case when everyone is working remotely.

As a leader, make sure you’re staying connected with your employees on a regular basis. Doing so will help them thrive in a remote environment and boost their motivation and productivity. Make sure you’re checking in frequently to ensure they have everything they need, and consider asking for feedback on what your business could be doing to create a more positive work environment.

You can also keep your employees connected to each other by encouraging group work and projects. Even if they can’t come together in person, there are plenty of ways they can work together on something through various digital platforms. Things like email, video conferencing, cloud-based storage, and instant messaging are all great ways to help your employees form strong working bonds. These bonds can help combat the feelings of isolation and loneliness that can sometimes come from working remotely.

It’s not just big businesses that will benefit from switching to remote environments. Your small business can run successfully with employees all over the world. Keep these suggestions in mind as you work to grow your endeavors, and you’ll keep your employees content while boosting your success.

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How to Create a Business Budget for Your Small Business