Master your budget in 2017
Budgeting is a necessary process for your business. But where to begin? The right techniques can simplify this often painstaking process and condense it into a no-nonsense series of steps. Here’s how:
1. Overestimate your expenses and underestimate your revenues. Setting modest goals is a way to keep cash flow in check and expenses manageable. If you overestimate how much money you make, your cash flow will suffer, which can result in some hard decisions. On the other hand, low balling your income means your business will be more resilient during lean times and seasonal bumps. You should have a strategic plan in place for how to handle these challenges.
2. Check in regularly. A balance sheet should bot be a static item. Prices of goods fluctuate and you need to take those factors into account. The same goes for other externalities like legislation and health insurance costs. What worked last month might not work this month. You don’t want any unwelcome surprises, so be sure to tune into the economic and political landscape.
3. Plan for your busy and slow seasons ahead of time. Businesses with clear busy and slow seasons often face the challenge of finding a balance. Busy times mean income, while the “off season” can mean dryer times. Still, recurring expenses don’t go away. The key is to put away money when business is booming so you have some reserve during a lull.
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