Running in all size of business include small business, both for the first or established one, the importance of preparing budget can not be underestimated. Estimating and matching expense to revenue is important because it helps the business owner to determine whether they have enough money to support the business activity and expand the business. The goal is to make sure that the business has enough money for business activity, to grow the business, to compete, and to ensure a solid emergency fund.
Creating a budget can be done in a way that is suitable for you, whether manually, using a spreadsheet program, or using accounting software program. The owner can choose the time period for the budget (monthly, quarterly, annually). A monthly budget allows the owner to compare the estimated numbers with the actual ones at a closer period.
There are two simple tips to make budgeting process easily for small business :
- Proper adjustment. The hard economic condition makes business owners to cut expenses and increase cash flow. Specifically, pay attention to the nonessential item and cut the related expenses.
- Having a consultation to a professional, such as financial consultant will give you a great help to make a budget. A nonprofessional provides trusted service to help you to start the budgeting system that is suitable for your need.
- Review the business regularly
Business owners, especially the small business owners need to review the business budget more regularly. By doing this the owner can track the business budget and recognize the potential problem may occur.
Creating the business budget will provide the guideline for forecasted income and expenses. It is also to compare the business financial goals with actual amount. In short, having business budget allows the owner to measure the business performance and enable to set strategic decision. Ignoring the budget will risk the business which more money spent that received, or not spending money to expand the business.
