IT'S A NUMBERS GAME: THREE REASONS YOU SHOULD BE BUDGETING IN YOUR BUSINESS
by Emily Coogan
·
Meet the most important framework of your business: budgeting.
As a creative entrepreneur, it's easy to focus on the exciting and artistic side of business, neglecting the numbers and financial aspects that may seem daunting. But rest assured, it doesn't need to be.
Careful budgeting is an investment in growth as it feeds into every nook and cranny of your business. A budget acts as a financial roadmap, which is especially important for small business owners who operate on a shoestring budget without the backing of investors with large pockets.
Here are three of the primary reasons you should be budgeting; that is, devoting necessary time and energy to one of the most important guiding tools for your business.
REASON 1: FORECASTING
A detailed and realistic budget will look to the future, accounting for anticipated sales, profits, and expenses. Without this financial crystal ball, you leave your business vulnerable to nasty surprises and unforeseen market challenges - all of which can be predicted AND prevented during the budgeting process. This feeds into the strategic big-picture planning that supports your business, guiding your decision-making processes moving forward.
REASON 2: CONTROL AND MANAGEMENT
The process of budgeting allows you to better articulate and refine your vision and associated strategy. Understanding how your business fares in terms of financial health imposes discipline to ensure you can make confident financial decisions at every twist and turn. The control lent by a carefully constructed budget means you can focus on other aspects of your business rather than running in financial circles. As a result, you are equipped and ready to allocate resources as required and commit to all you need for future projects without worrying whether you are being stretched beyond your means.
REASON 3: PERFORMANCE TRACKING
Your business budget will provide a benchmark to refer back to with each new sale, product, and campaign. This benchmark is a valuable tool to evaluate the performance of your business and understand whether you are meeting, exceeding, or may need to review your goals. In addition, performance tracking according to a budget can improve all facets and departments of your business as you grow, directing your attention to the areas that are consistently working well or might need improvement.
But how do I even begin to budget?
Preparing a budget and becoming fluent in the language of business takes a guided effort. Get started with our Guide to Budget Building or stay tuned for our next Elevate Business Planning Course intake.
|
If you enjoyed this piece, make your next read: How to Attract Loyal Customers Who Keep Coming Back.