When it comes to creating a budget, it’s essential to estimate your spending as realistically as possible. Here are three budget-related mistakes commonly made by small businesses, and some tips for avoiding them.
1. Not Setting Goals
It’s almost impossible to set spending priorities without clear goals for the coming year. It’s important to identify, in detail, your business and financial goals and what you want or need to achieve in your business.
2. Underestimating Costs
Every business has ancillary or incidental costs that don’t always make it into the budget–for whatever reason. A good example of this is buying a new piece of equipment or software. While you probably accounted for the cost of the equipment in your budget, you might not have remembered to budget time and money
needed to train staff or for equipment maintenance.
3. Failing to Adjust Your Budget
Don’t be afraid to update your forecasted expenditures whenever new circumstances affect your business. Several times a year you should set aside time to compare budget estimates against the amount you actually spent, and then adjust your budget accordingly.
Creating and following a budget in your business is a lot easier than many entrepreneurs think. The key is to remember to keep it simple and review it often. Start with the end in mind when you create your budget and you’ll be more motivated to stick to it!
Be Proactive, Be Productive, Be Profitable!
Kemberli Stephenson is The Pr
ofit Sherpa & works with rapid growth women entrepreneurs, speakers, coaches, authors, small business owners, entertainers, etc. She helps those who are looking to impact their bottom line, increase profit margins and grow a successful business. Kemberli helps entrepreneurs rapidly increase profits by helping individuals and companies chart a course to the summit, discover their danger zones and blind spots, and develop and implement profit strategies that will grow as your organization grows. Follow @Profit_Sherpa on Instagram for daily tips and motivation for entrepreneurs.
ofit Sherpa & works with rapid growth women entrepreneurs, speakers, coaches, authors, small business owners, entertainers, etc. She helps those who are looking to impact their bottom line, increase profit margins and grow a successful business. Kemberli helps entrepreneurs rapidly increase profits by helping individuals and companies chart a course to the summit, discover their danger zones and blind spots, and develop and implement profit strategies that will grow as your organization grows. Follow @Profit_Sherpa on Instagram for daily tips and motivation for entrepreneurs.