Does your business have a budget?

Creating a corporate budget—or even a household one—is arguably one of the most important tools in business. A business budget provides a roadmap for expected income and expenses and allows you to compare your financial goals with actual performance. In short, it serves as a barometer for how your business is doing. (Entrepreneur Magazine, 2009)

Every small business should conduct an annual budget review and planning session to ensure that their numbers are up-to-date, relevant, and aligned with growth goals. A well-crafted budget serves three major purposes:

1. Control Business Expenses

A business budget helps ensure that company cash is used wisely. This may mean reducing unnecessary expenses, negotiating better vendor pricing, or even reviewing profit margins to make sure the business is actually generating profit.

2. Assist in Growth Strategies

With better control over cash flow, your business can invest in marketing, sales efforts, and seize new business opportunities that arise.

3. Ensure the Business Owner Gets Paid

Your budget should not just sustain the business—it should also support YOU, the owner. You are the visionary, and a solid budget ensures you are getting compensated appropriately for your leadership and work.

Don’t have a budget yet? It could be the single most important step you take to improve your business performance.