A Budget? Oh No!!!

There’s an interesting article today in the American Express Open Small Business section entitled “Creating Your First Small Business Budget.”

The basic tenet is that most small business owners are not financial gurus.  They are experts in whatever industry the business operates.  However, without being able to plan for income and expenditures for the year, there is no way to know how the company is doing.  Is a particular product eating up excessive amounts of cash?  Are your payroll expenses too high in relation to total expenses?

I encourage you to click the link above and read the actual article.  Here are the main points.

• First, the purpose of a budget is to simply consider carefully how you’re spending your money
• Second, a budget plots your financial path to where you want to be
• Third, don’t get bogged down in formality.  One of my colleagues stresses that budgeting uses a very specific technique called guessing.  He uses a crystal ball that is almost always wrong.  Budgeting needs to be a close as you can get, but it will be wrong.
• Fourth, remember that this is a living document.  Things change during the year.  Unexpected expenses arise.  Proper budgeting will have built in extra funds to handle large surprises.
• Finally, seek some help if you’re feeling overwhelmed by all of this. Find yourself one of those financial gurus to help you walk through the process.

The link to the article is here. It’s still early in the year, now is the perfect time to begin this exercise.

No Comments

No comments yet.

RSS feed for comments on this post. TrackBack URI

Leave a comment

You must be logged in to post a comment.