In a new feature I will be answering questions that I get here on the blog, in email, and in real life. I get TONS of questions and figure that here is as good a place as any to start answering them. If you have a question you can leave a comment, email me or stop me at the grocery store. Whatever works for you. I, like Lucy from Peanuts, am in.
Question: Does my small business need a budget?
Answer: Yes. I KNOW that wasn't the answer that you wanted, but really, you have to have an idea of your cash flow in order to run your business effectively. It can be simple though, you probably aren't running Apple so you can get by with some quick figures and call it a day.
What you need to put into your budget:
Expenses:
Rent
Utilities
Phone
Internet
Supplies
Advertising
Labor
Taxes
Subscriptions/Memberships
Income:
If you have multiple areas of income you can have a line for each area.
Now, I also like to put a line in for considered expenses. Such as, if this is the year we are buying a new computer, camera, office equipment, etc. I like to figure that in at the beginning. Granted, things happen and you have to do it when you have to do it, but if you KNOW that will help you with planning.
Now, if you KNOW your monthly income and expenses per month you can make a column that shows each month, but if you don't that is ok. Don't let it stop you from doing a budget. Even a rough budget will help you understand where your money is coming and going. If you find during the year that you are having less/more of expenses or income you can readjust your budget.
Here is the bottom line, knowing what you have is less scary than not knowing. People who aren't used to dealing with money or have had money issues personally can often be hesitant to put it on paper, but believe me - knowing is empowering. If you ARE making a profit you will see that, if you aren't you will see that too. It allows you to make some changes. Real changes from real answers.
Even if you aren't 100% sure what your numbers are, estimate them. If you need a template I highly recommend that you search Google Drive for any number of excellent templates. Really, though, it can be in a Word or Excel document and serve you just the same.
Do you have a question? Ask Moxie!
