You’ve probably been reviewing (or will soon review) last year’s finances in preparation for finalizing your budget for 2014. If you haven’t been tracking your budget throughout the year, you may be seeing a surprise here or there: Budget variances that you didn’t expect.
If you’ve been significantly over or under budget in some key areas, spend some time exploring the reasons behind the variances. Then build those into your budgeting process for next year. You’ll also want to take the advice of small business owner and sba.gov contributor Caron Beesley, who writes about building and using a business budget that’s useful all year long.
Budgets are, of necessity, dynamic, Beesley says, but tend to be difficult to plan and maintain even in the best of times, due to cash flow issues, supply chain problems, unexpected events—you name it. But your business is never static, and neither should your budget be. So, she provides several tips for making your budget a fluid and adaptable tool you’ll actually use in the coming months:
Inc.com can help you get started with developing a budget that will function like a map or GPS would in your car, keeping you on track and headed in the right direction. Must-have budgeting components include the following:
Your budget should operate like one of the following basic equations, depending on how you look at it:
a.) Sales = total cost + profit
b.) Sales – total cost = profit
Drafting your business budget gets easier when you’ve got a few under your belt and can refer to last year’s. But if this is your first budget rodeo, take heart. There are a few steps that can help you get started:
It’s easy to be intimidated by the budgeting process, but don’t be. You’ve just got to dive in to get started. And by all means, don’t hesitate to reach out for some help in the way of an accountant or other business professional. Inc.com also recommends some terrific resources to tap during your budgeting journey:
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