How to put together a budget for your small business

February 5th, 2017


If you want to run a business that's successful over the long haul, you need to do it with structure and discipline. You can't just go out and spend as much as you want on whatever you please - there must be an established plan that you're willing to adhere to for everything, including the money you spend and the time you dedicate to each task in front of you. In short, what you need is a detailed budget.

Good budgets are dynamic, and they respond well to changes in the market around them.

This doesn't necessarily mean you need to spell out every single expenditure on your very first day of operation, then stick to that plan forever. Good budgets are dynamic, and they respond well to changes in the market around them. You should begin with a plan, then be ready to adjust it later when the time comes.

At the start of a new year, make sure you're going in with a Plan A in mind. From there, be ready to roll with the punches.

Taking steps to plan for 2017

Especially when you're at the helm of a young business that's still growing, every year presents its own unique challenges and obstacles. Almost certainly, you have plans in 2017 to achieve new things that you didn't in 2016. That means you need to create an entirely unique budgetary plan.

According to the Victoria State Government, the best way to look ahead to a new year is to look back at the previous one, assess what worked and what didn't and make the necessary adjustments. Look at your company's expenses and losses - where can you make small cuts from your spending? Where can you attack a current source of revenue more aggressively and bring in more?

Think also about how your cash flow situation might change. You need to pay attention not only to the on-paper gains and losses you anticipate, but also when the money in question will physically change hands. This is crucial to the day-to-day operations of your business.

Planning effectively for everyone involved

You want to make sure that every stakeholder involved in running your business is happy with the budget you draw up. Consider breaking it down by department - product development, marketing, sales and so on. Does every section of the business have the working capital it needs to be successful?

Consider adjusting your company's plans on a monthly basis.
Consider adjusting your company's plans on a monthly basis.

The answer to this question might change from month to month. This is why it's necessary to revisit your budget monthly (if not more often), examine your results and assess how they differ from your prior expectations. If you're not making money quite the way you hoped, it could be time for you to make some serious adjustments.

Again, this isn't just about the positive and negative numbers in your ledger - it's a matter of physically having the cash on hand to keep your business running from day to day.

Need some cash to make ends meet?

If you're regularly having trouble reconciling your company's operations with the financial plans you made initially, it might be time to take significant steps toward improving cash flow and guaranteeing you have the money you need to stay operational. One way to do this is by arranging for invoice finance.

Collecting payments from customers can take weeks; you never know whether someone might pay you on time or they might put it off. With invoice finance, you don't have to worry about that. Instead, you have steady, reliable access to the cash you need, meaning you can press forward with budgeting and planning your business effectively.

If you'd like to learn how Earlypay's Invoice Finance & Equipment Finance can help you boost your working capital to fund growth or keep on top of day-to-day operations of your business, contact Earlypay's helpful team today on 1300 760 205, visit our sign-up form or contact [email protected].