You can’t run a successful business without knowing where your money is coming from and where it’s going. In short, you need a business budget.
To help you and your business operate as efficiently as possible, here’s a quick guide to help you manage your business budget.
1. Take a look around your industry.
You know your business better than anyone, but what are some best practices, standards, or rules and regulations for balancing a budget in similar businesses across your entire industry? If you sell vintage clothes online, for example, there may be an online community of business owners who know the best ways to make, save, or spend a buck. What’s more, these tips and tricks might not work as well for someone who works in a different industry.
The point is this: Explore other businesses in your industry, see what they’re doing, make connections, and ask for help when you need it.
Online forums such as Medium and Discord are popular online communities that give people an opportunity to share ideas and learn from each other.
2. Crunch some numbers to balance your business budget.
To start, you need to know three key business figures: income, revenue, profit.
- Your income is any amount of money that your business earns, which typically comes from the sales you make or the fees you charge for your products/services. Note that income does not include any money that comes in from loans, grants, or donations.
- Your revenue is essentially the same thing as your income—before your expenses are deducted.
- That leaves your profit, which is any of the money that’s left after you’ve deducted your expenses from your revenue.
Find out what you earn and what you spend throughout the year. From there, compare and contrast your figures from month to month. If you determine that your business made gains in April but losses in November, for example, you’ll have an idea of what to expect in the following year—and adjust your business activity accordingly.
3. Go digital.
Organization is key here. Consider using digital budgeting tools such as QuickBooks, Jirav, or any of these 14 business budgeting software platforms and tools. If you’re feeling confident about balancing your budget in a simple spreadsheet (Microsoft Excel, Google Sheets), go for it! Here are some free business budget templates to try.
Worth reading: How Budgeting Works for Companies
Some tools and resources you can use right away:
- Business Budget Calculator
Simple and straightforward tool to calculate your income and expenses
- Federal Deposit Insurance Corporation: “Building a Good Budget” training module
Comprehensive training document featuring budget fundamentals, common questions, and more
- Practical Business Skills: Budgeting
Learn about business budgeting in four easy steps with a video and other insights.
Need a hand? We can help!
Balancing your budget can be difficult—but it doesn’t have to be. As your partners in financial health, we’re here to help you stay on point and in the black. Contact us today!