Money. We’ve certainly heard a lot about this lately, haven’t we? With our economic crisis and many around the country (and globe) pinching pennies, it makes sense to learn more about our money and what we can do to have some control in this fluctuating economic environment. One way to take control is with your budget.
3 Budgeting Mistakes Small Businesses Make:
- Not having a budget – A show of hands out there…those of you that have small businesses, how many of you have a budget? Ok, now how many of you actually follow it? My guess is not very many. This is understandable! With revenue unpredictable for small businesses, we may decide to buy things when we have a good month. Instead of this approach, your business should have a budget with which all financial decisions are made. It should be developed in advance to your fiscal year and treated as a living document that can be changed as needed and used to run the business day-to-day.
- No business plan – Even if you do have a budget, if you don’t have a business plan to tie your expenditures to your revenue goals, you might as well be driving to an unfamiliar destination without a map. There are some good systems out there that walk you step-by-step through implementing a business plan. (E-mail me for suggestions and I can direct you to the ones I think provide the best information for the best value.) Once you understand your strategic objectives, then you can spend your money where it will make the most impact.
- Failure to systematize budgeting – Budgeting, like everything else in your business, should follow a system. Everyone in your company should know what is expected of them and how to meet the company’s financial goals. These systems should be clearly spelled out in your operations manual and updated as variables change. If you need help setting this up within your organization, contact us.
Nicole Recommends…
My favorite way to ensure that I am always learning is to try to use my downtime (in the car, while working out, etc.) to “read” business books that will sharpen my business skills and help me grow as a person. A simple way that I have found to add continual training for a reasonable (and easy to budget!) price is by using www.audible.com. Audible is a service that allows you to download audio books for a monthly fee that is typically a fraction of what you would pay for the same audio books in bookstores. They have most of the major titles out there not only for business but also fiction, self development, and even newspapers and magazines. Check it out for only $7.49/month for the first three months and download your favorite books to CD or mp3!
