Business planning is one of the most disregarded and avoided parts of building a successful business. It’s quite surprising since one of the top 10 reasons small businesses fail is due to poor planning. Poor planning is simply not identifying the necessary resources, tools and strategies to be utilized in all areas of the business, from marketing to finance and every area in between.
One key area in the business planning process is to create an annual and monthly budget. Budgeting is deciding how the financial resources of your business will be allocated. It also helps you be more proactive in your decision making versus reactive. You can think of it as your road map to keeping your profits in the black. If you utilize your funds according to your budget it will keep you from investing in every new bright and shiny object that hits the market. Simply put, if the expense is not in the budget then you need to ask yourself if investing in the item will move your closer or further away from your profit goal.
No one knows the future and there will be unexpected revenue and expense challenges but your budget will help keep you focused on the actions necessary to achieve the profit you desire. Below are a few additional benefits of creating a budget for your business.
Benefits of Budgeting:
- Controls and monitors spending
- Measures the financial operations of your business
- Outlines projected revenues and expenses
- Ensures you achieve your business goals
- Proactive and forward thinking management approach
Business owners that go beyond understanding the benefits of planning to actually creating and utilizing a budget monthly will likely see their bottom line increase. Those that do not will be left wondering where their money goes month after month.
Have you created a budget for your business? If not, then click here to request a complimentary discovery session so we can customize a budget and plan that will turn your business into a profit generating machine.