The Ultimate Budget Guide for Small Businesses

Are you a small business owner? Do you have trouble managing the cash flow in your business? You are not alone and the struggle is real. In this article, I’ll be going over some of the ways that you can keep your business on track and dealing with money in a way that’s healthy and productive.

When it comes to keeping your budget under control, there are a few things that you can do. First, make sure that you know what your monthly expenses are going to be. This may require some research, but once you have this number, add up all of your income sources and subtract them from what you expect to spend each month; now, see if there is any money left over. If there isn't any money left over, then you're spending too much. This means that either your income is too low or your expenses are too high. You need to fix at least one of those things before anything else can be done about it!

The next thing to do would be cut down on unnecessary costs. Take a look at every single expense line item for each month's budget sheet and ask yourself if it's really necessary or not. If not, then cut it out completely from the budget!

Always have a plan for unexpected expenses. Your businesses is bound to run into unexpected expenses. The question is whether or not those costs will break the bank for months or years to come. To prevent this from happening, make sure that you set aside at least 10% of your monthly revenue in a savings account specifically designed for unplanned expenditures. This should help mitigate any negative effects that occur when a surprise bill lands in your lap.

Use budgeting software or templates.

Fortunately, there are plenty of budgeting software and templates that can help you keep track of your business finances. Some of the most popular products include Quickbooks Online, Xero Accounting Software, and Freshbooks. These products make it easy to create invoices for clients, track your expenses, manage payroll, and more. And the best part is you can sign up for free trials.

Other options include creating your own spreadsheet in Google Sheets or Microsoft Excel or downloading a template from a website like Vertex42. If you have experience with these tools, this is a cost-effective way to manage your business finances. However, if you’re not comfortable with spreadsheets or if you don’t have time to create them from scratch, budgeting software may be a better option for you.

Create a plan for sticking to your budget.

1. Create a system. The first step to sticking to your budget is making one! This can seem daunting, but it doesn't have to be. There are plenty of free templates online and in apps that can help you get started.

2. Break your budget into categories. The next step is deciding where your money will go, and making sure those categories fit into your overall goals for the year. For example, if you want to scale up this year and hire more employees, you'll need to make sure that salary and benefits are accounted for in your budget plan!

3. Give yourself some wiggle room. Try not to get down on yourself if you overspend in one category—you can always cut back elsewhere, or take from your wiggle-room fund if necessary.

4. Prioritize savings goals ahead of spending goals. Are there certain things you want to save for? Do you want to buy a new computer for work this year? Make sure you put aside money every month so that when you're ready to purchase, you don't have to cut the budget.

Track spending and compare it to budget monthly.

Small business owners must track their spending and analyze it compared to budget to ensure that their companies are sustainable. Many small businesses fail in the first few years because they overspend or fail to invest wisely in the company, but financial oversight can help you avoid costly mistakes.

It’s a good idea to check in weekly with your financial data, but you should also dig into the numbers monthly. Monthly reviews allow you to spot trends and correct problems before they get out of hand.

Just keep in mind that your dreams will come true but you have to make them. I've had lots of clients that couldn't figure out how to manage their finances and had to close their businesses for good. Be sharp, stay up to date and you'll achieve your goals with ease. I hope you like this guide and if so please consider subscribing to my newsletter to get notified when I publish daily content.