Do you want to keep your business expenses under control and maximize your business income every year? Creating and maintaintaining a budget is a great way to keep your business running smoothly. In this article, we'll look at how to make a budget, how to stick to a budget, and some budgeting tools. We'll also discuss a concept called zero-based budgeting that can help make budgeting easier and more realistic.
A budget is a way for a business to set goals and review experience (income and expenses) in relation to these goals. To be effective, a budget should be easy to set up and maintain and it should be accurate, giving you a complete financial picture of your business. Included in this article are discussions of budgets for startup, how to use a budget to get a business oan, and zero-based budgeting.
Business budgets are helpful to plan startup, work with a lender, estimate income and expenses, and so you can know your required profit. If you know how your business is doing, you may find you work smarter and keep expenses to a minimum.
This article takes you step by step through the process of creating a business start-up budget. Begin by listing everything you will need for "day one" of your business (the day you open your doors to customers), and continue through capture of income and expenses and comparison of actual expenses with budgets.
Some tips on using a budget to get a start-up loan, including;
- Over-estimate expenses and under-estimate income
- Focus on cash flow, not profits, and
- Create several budget scenarios.
Holding a definitive budget in your hand can make the difference between getting that loan or going home empty-handed.
Most budgets begin with last year's figures and add or subtract to them. Zero-based budgeting (ZBB) takes a different approach. ZBB starts each year at zero and works on the principle that you must justify each category of expenditure every year. Even a small business cn use a ZBB approach to make budgeting more meaningful and realistic.
The easier it is to budget, the more useful your business budget will be. You can create and maintain a budget easily and inexpensively with these tool options: financial management software, spreadsheet software, or online financial management websites.
Most online budget software applications, such as Mint or Thrive, are for personal budget purposes. But some might be useful for business budgeting. If you have used one of these services, either for personal budget or business budget, rate your experience with this software.