Corporate budgets, as well as household ones, are arguably one of the most important tools you can use. Creating a budget for your business will provide a guideline for expected income and expenses and enable you to compare your anticipated financial goals with the actual numbers. In essence, it will serve as a barometer for how your business is performing.” (Entrepreneur Magazine, 2009)Small businesses should go through an annual budget preparation/modification session to ensure that their budget is current and accurate. The annual budget has three major goals:
1. To control business expenses to make sure company cash is utilized most efficiently. This might require owners to cut spending and seek out new suppliers and vendors to meet budget restraints. Companies may also need to review margins to make sure that they are actually MAKING MONEY.
2. To assist in growth strategies. With decreased excess spending, companies will gain cash reserves to participate in marketing and sales efforts as well as possibly investing in new business opportunities as they arise.
3. To ensure that YOU, the business owner, the mastermind, the vision-head is actually GETTING PAID and not working for free.
If you do not have a budget in place, get one. It may be the best thing you ever did for your business!!!