Budgeting Tips for Small & Growing Businesses
Written and submitted by Auxana Member: Matthew Fornaro, Attorney at Law serving Broward County, Florida
Many small and growing businesses have struggled during 2020 to remain open. The coronavirus has changed how we do business in the United States. However, sound budgeting tips have not changed. Budgeting, creating realistic goals, and planning for the next year are essential steps that every business owner should take as we end 2020 and look forward to 2021.
As business owners begin planning for 2021, it can help to keep basic, sound budgeting tips in mind. Budget tips for small businesses that could help you expand and grow in 2021 include:
Don’t Neglect Your Emergency Fund
If 2020 has taught us anything, it is that we cannot predict what might happen in the future. Having an emergency fund helps your company deal with unexpected expenses.
Set Reasonable and Realistic Goals
The goals for your company over the next year have an impact on numerous areas of your budget. Take time to consider where you want your business to be at the end of next year. Decide the steps that you need to take to achieve your goals and the cost of each of those steps. Use those projected costs when creating your budget.
Depending on your budget, you might need to revise some of your goals. Reviewing your goals and budgets at least once every quarter helps you make necessary adjustments and stay on track.
If specific employees are held accountable for spending, make sure to include them when planning the budget. Get their input regarding spending and budgeting. They have a unique perspective about their department and the spending that might be necessary to keep the department on track to meet its goals for the coming year.
Be Realistic and Conservative
A budget is nothing but numbers on a piece of paper if it is not realistic, and you aren’t going to stick with it. If you slash spending to make your budget work, ask yourself if you truly will be able to slash that spending. Your budget must be realistic to work.
However, you must also consider the unknown. When creating your overall budget and budgets for projects, build a small cushion for the unknown. There are several ways to do this when budgeting. You can round up budget figures or include a line item in the budget for contingencies.
Apply for Financing Early
If you anticipate that you will need financing in the upcoming year, apply for financing early. You do not want to run into problems with your financing after you need the money. It is best to have the financing approved and ready to go before you intend to begin a project.
Utilize the Right Tools
There are numerous accounting software packages to choose from to help you with budgeting. Review the system you are currently using to ensure it is the right system for your company. If there are more things you wish you could do with your budgeting software, you might want to take time to review different accounting systems to determine if they provide the tools you need to increase efficiency.
Also, make sure you have the right people handling your accounting and recordkeeping. If you cannot afford to hire a full-time accountant or bookkeeper, consider outsourcing these tasks. Outsourcing allows you to have an experienced professional working on your books without the cost of hiring a full-time employee.
Contact Our Coral Springs Business Law Attorney for More Information
Attorney Matthew Fornaro provides legal services to companies and business owners throughout Broward County. If you have questions about starting a new business or dealing with any business legal matters, we can help.
Call 954-324-3651 or contact us online to schedule an appointment with an experienced Florida business law attorney.