Budgeting, the dieting of the small business world. It conjures up images of boredom, restriction, and way too much effort with no instant gratification. In fact, it sits on your to-do list right next to going to the dentist and dusting your fans. It’s at least a couple of years overdue and you might get around to it if, and only if, there’s an emergency.
But what if we told you budgeting has been misunderstood? Budgeting just wants the best for you. Budgeting will help you achieve more. More time, more freedom, and more money.
Ready to sign yourself up? Here is what you need to know before you dive headfirst into budgeting.
Get your ducks in a row.
When setting up a successful budget, there should be no guesswork involved in the current cash flow of your business. Time and money are the most valuable resources in a business, and you need to know how they are being spent. As budgeting is the process of planning how you will spend your money, the first step is spring cleaning your books so you can see yesterday’s data, not last months.
Here at Orbit, we recommend using Xero to keep your books and budgeting in order. Don’t be alarmed, budgets are not here to micromanage every cent you spend. They serve as a helpful resource for business decision making and will help you identify opportunities to grow.
Get your head out of the clouds.
Unlike your business’s vision and other audacious goals, your budget needs its feet firmly planted on the ground. We are by no means saying to bring your inner cynic out, on the contrary, we encourage nothing but a positive mindset when approaching your budget.
However, you can’t sugarcoat your numbers. If you are struggling to put your realistic cap on, this is where a small business accountant can save the day. At Orbit, we check your numbers, set targets, make realistic predictions on your business’s growth, as well as helping you understand all your upcoming expenses and tax exposure.
Get clued up.
There is nothing mystical about budgeting. Even if maths was your least favourite subject in school, and your financial report might as well be written in Latin, it doesn’t mean budgeting has to be daunting. A well-planned budget will highlight how much revenue you need to bring in to cover your business expenses, and it will allow you to make educated decisions on how cash can be reinvested into your business. Plus, having a comprehensive budget is a requirement when obtaining business loans from banks or seeking equity from investors. So if you ever need a helping hand, your budget can make a good introduction.
Instead of running around in circles, having a budget will put the driving wheel back in your hands and help you reach your business goals. A well-planned budget will provide you with the insights you need to eliminate wasteful spending and present opportunities to increase your revenue. You can sleep easier at night knowing you are not spending more than you earn and you have enough funds tucked away for tax or another lockdown. While setting a budget isn’t overly complicated, working with a small business accountant is a worthwhile and informative experience that will leave you armed with knowledge and a clear plan of action.
Get your team onboard.
Your budget is not like your banking password, it doesn’t have to be top secret. At Orbit, we share our budget with our team as they play an important role in generating revenue and sticking to our budget. The more empowered and engaged your team is, the better your business’s outcomes.
Outside of your team, we believe in a co-pilot approach to small business accounting. As a small business accountant we know how to put a solid budget together but we will need your industry expertise to guide us. Are there seasonal trends we need to be aware of? Are there pending changes to regulations that could impact your income? Budgeting is not just about the numbers but the intricacies of your industry, your market, and your unique goals, which all need to be taken into consideration.
Not sure where to begin? A small business advisor can help you create a solid budget and shed light on what to do if your numbers deviate from it.
At Orbit, our budget centres around your business goals. Whether your goal is to get out of debt or hire a new team member, we work backwards from there to make achieving them a reality. If you are ready to tackle your budget and make more possible, book a chat or get in touch today.