How to make a business budget

We know. Making a budget is probably your least favorite part of running your business, but if you are serious about your venture then it is a must.

Why is it important?

Having a budget will help your business run easier and in a more efficient way since it will show if you’re spending money in the right way and at the right time. This is a great way to stay out of debt!

With a business budget in place you will be able to make more informed decisions. It helps you evaluate how your finances currently stand and what you need to do to achieve your goals. You will also identify where to cut spending or the other way around, what side of your business needs you to spend more money.

Without a budget, you might end up spending money you don’t have or not spending enough to stay ahead of the competition.

How to make a business budget

Have clear goals

It’s important to firmly understand the goals you have for your business. This way you can create a budget that not only aligns with those goals, but that will facilitate them and help you make them a reality.

Analyze Costs

According to a study by CB Insights, pricing/cost issues are at the top of reasons why small business fail!

Deep knowledge of your operational costs gives you the baseline to create an effective budget. Without it, you might later find out that you needed more money to keep the business runing. This will put your goals at risk.

Estimate Revenue

The most important thing when estimating revenue is to stay realistic. If you overestimate, you’ll end up having to borrow to keep your operation running. Use the previous year’s data as a reference point so you know for a fact your budget is based on reality.

Unexpected costs

These show up when you least expect them and probably when you’re not ready to deal with them. You need to make sure you have some room in your budget for them. When it comes to laundry there’s a lot that can result in unexpected costs.

If your thinking of acquiring laundry equipment you should know that the expenses don’t end with the purchase of the machines. If something goes wrong with a piece of equipment, you’ll have to make a service call and then the technician might find that you need to buy new parts. All this will add expenses that are not on your budget because you didn’t expect them.

The good news is that with Southeastern Laundry’s leasing agreements you can get the most up-to-date, energy efficient equipment without ever having to pay for service or parts, and routine scheduled maintenance is included. You get all this for one simple monthly payment so you don’t have repair cost surprises!

You’re ready!

Once you gather all the relevant information described above, you’re ready to create your budget. Remember that even if it’s not fun, budgeting is essential for your business so don’t skip it!

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