Business Budgeting is Key
“A budget is telling your money where to go instead of wondering where it went.” – Dave Ramsey
One of the most important financial resources available to any small-business owner is business budgeting. Simply put, you can manage your cash flow (see February’s newsletter about cash flow) instead of letting it control you by maintaining an excellent short- and long-range financial plan.
A budget is the forecast of revenue and expenditure for a given future period. It is a financial plan for a given duration, typically a year, known to increase any financial business’s performance dramatically. Giffin Bookkeeping can help you with creating a budget.
If you are in the start-up process, you will need to make fair assumptions about your company in determining your budget. To do this, you have to ask yourself these questions:
How much can I sell in the first year?
Will I need to keep inventory, and how much will I need?
How will I set prices for products and/or services?
How much will it cost to create my products?
How much will sales increase in the years following?
What operating expenses will I have?
Will my business be an S-corporation or a C-corporation? Will it benefit me to stay as a single member LLC tax classified as a sole-proprietor?
Will I need employees? How many will I need?
How much will I pay the employees?
Will I offer benefits?
How much will I pay myself?
What will my payroll and unemployment taxes be?
Will I need to rent, and what will it cost?
Will I need equipment, and how much will it cost?
