If you have a business, one of the best things you can do to continue to thrive and grow over time is take control of your budget. The amount of business owners that neglect to do this is astounding, and it can truly affect your business in a negative way.
If you know that you need to work on becoming a better budgeter to get your business where you want it to be, you’re in the right place. Here, you can find 10 ways to be a better business budgeter. You’re bound to be able to pick up some of these tips and use them to improve your business:
Create Your Cash Flow Budget
Start by creating a cash flow budget. This type of budget will help you to ensure that you are able to comfortably pay all of your expenses, a well as manage your revenue proactively. You must include your sales/revenue forecast, anticipated outflows, cost of the goods you’ve sold, any debt repayments, and operating expenses for your cash flow budget to be as accurate as possible.
This budget must be kept up to date to make sure you reflect any changes in your business.
If you have a business, one of the best things you can do to continue to thrive and grow over time is take control of your budget. The amount of business owners that neglect to do this is astounding, and it can truly affect your business in a negative way.
If you know that you need to work on becoming a better budgeter to get your business where you want it to be, you’re in the right place. Here, you can find 10 ways to be a better business budgeter. You’re bound to be able to pick up some of these tips and use them to improve your business:
Create Your Cash Flow Budget
Start by creating a cash flow budget. This type of budget will help you to ensure that you are able to comfortably pay all of your expenses, a well as manage your revenue proactively. You must include your sales/revenue forecast, anticipated outflows, cost of the goods you’ve sold, any debt repayments, and operating expenses for your cash flow budget to be as accurate as possible.
This budget must be kept up to date to make sure you reflect any changes in your business.
Try Zero Based Budgeting
Zero based budgeting is a method you can use to project your budget for the next fiscal year, based on your goals for the current year. You simply budget ensuring that all of your expenses are justified. You start from a zero base and every function in your organization is analyzed for its needs and costs. Think about your goals for the next fiscal year. Maybe you want to give your website an overhaul, or build a bigger online presence. There are many valid goals you could choose to take on, and zero based budgeting helps you to ensure you can afford them.
Ensure You’re Budgeting For Growth
For the majority of business owners, growth is always at the forefront of their mind. Growth should be taken into account when you’re creating your budget too. For instance, if you want to do a website makeover as mentioned earlier, you’ll need to invest money in web development.
Make sure you research all of the related costs and include them in your budget. Don’t forget to look at your suppliers and figure out whether they’ll be able to continue working with you as you grow. Buying equipment from CLSmith.com can help to support you whatever size your business may be, so make sure you look for similar companies. If you don’t prepare to succeed then you better prepare to fail.
Boost Your Sales By Improving Customer Experience
Finding more customers and giving your sales a boost will give you more of a budget to work with. Make sure you consider the associated costs with bringing in new business, though, before you go out and do it. If you’re going to focus on bringing in new customers, for example, you’re going to need to increase your promotions and likely your marketing budget on top of this.
So, this leads us to ask the question, how can you increase customer value? Start by mapping the customer journey and assess if you can make any improvements to help the experience and improve your bottom line. You need to figure out whether you’re making it easy or difficult for customers to pay you. Ask customers for honest feedback and you can make improvements.
Know What Will Have The Most Impact On Your Cash Flow
You need to have a good idea of which items will have a big impact on your cash flow. For instance, overheads or the cost of goods sold is something you can’t really do anything about. Because of pressure from your competitors, you may not be able to increase your prices either.
Manage Credit You’ve Extended To Your Customers
If you’re going to manage your cash flow effectively, you need to make sure you have policies in place to back this up. How can you get your clients to pay you faster? You could give incentives for early payment, and consider putting interest on accounts that are due to be paid. Late payments will affect your cash flow negatively, and you’ll likely have to make extremely late payments write offs, so you should never begin relying on late charges as a source of income for your business.
Reduce Your Expenses
Are there ways you can begin cutting back? Perhaps you could become a more eco-friendly business, going paperless and buying second hand to help reduce your expenses. You must make sure you’re not compromising on quality and impact, however.
When you begin getting more business, you need to be sure that you can bring in freelancers or contractors before you commit to hiring full time staff. This way, you don’t have the same commitments and obligations and you can be 100% sure that this is what you need. An independent audit could help you to work out where you can cut back.
Keep Your Payables Up To Date
Review your accounts and payable schedules to help you figure out if you’re keeping up with your credit obligations. Having a schedule that shows how much you owe, to who, and so on can make sure you don’t end up going overdue on any bills.
Start Using Credit More Effectively
Using credit effectively is key if you’re going to become a better business budgeter. The best credit facility is going to depend on your unique company, plans, and existing credit facilities.
Don’t Be Afraid To Use Your Surplus Cash Flow
Make sure you know how much money you should have in an emergency fund for your business. Review your company’s cash flow history and see if there are any patterns that you should be aware of. Also, make sure you look at changes in the economy, like rate fluctuations and currency. These things could affect your revenues and expenses, so you’ll need to consider them to be the best budgeter you can be.
You can use surplus cash flow in your business for a variety of things, like paying off debts and expansion.
