Are you worried that your small business or nonprofit won’t have enough cash to make it in the future? If so, you have some work to do. When only 40% of businesses are profitable initially, you can’t afford to go at it without a budget.
If you’re trying to create a non-profit or small business budget, there are a few essential tips you can use to follow. Keep reading to learn five things you can do for easy budgeting.
1. Find Plans Related to Your Industry
There isn’t a one-size-fits-all budgeting plan in business. Every industry is different, so they’ll have different requirements for their budgets. Take this into account when you create yours.
If possible, find an example budget from a company that’s in your industry. Use that as a guideline when you’re creating a budget yourself.
2. Use Tech to Help
You can only do so much when planning your budget on paper. There’s no way to see historical data to find trends in your business easily. Using technology can help solve this problem and make for easy bookkeeping.
Modern accounting tools can connect to your bank account to download your business transactions. Once you import this data, you can see reports showing you valuable data about your business. Use this data to create smarter budgets.
3. Overestimate Expenses
Your budget will be on point most of the time if you do it right. However, your business can move in unexpected directions when you least expect it. If you don’t have spare cash lying around for when this happens, you’ll find yourself in a bad situation.
Budget extra money for savings every month. Your savings is there to cover you when you have more expenses than you expected during the month.
4. Calculate Non-Recurring Purchases
You don’t only have a fixed number of purchases to handle at your company. Your team will purchase several items every month that don’t fit into your standard operating expenses. If you don’t account for these, your budget will be off.
Create a section of your budget that accounts for these purchases. Let your team know what the limit is so you don’t go over budget on non-essential purchases.
5. Nail Your Operating Budget
There is a lot more to a company budget than monitoring your cash flow. You have a set amount of operating expenses and income coming in every month. You can’t create an easy budget if you don’t know what they are.
Look through your business to figure out every monthly expense, revenue source, and maintenance cost your company has. Knowing these things will help you create a great business or nonprofit operating budget that you can use to plan your company’s direction.
Easy Budgeting Takes Planning to Make Work
If you want easy budgeting in your small business or nonprofit, you need to do a little work to set up your system. The tips above will help you get you there, but things might change depending on your situation. Keep tweaking your system until you find a way to make your business budgeting a breeze.
If you found value in this post, head back to our blog to see more tips that will help your company succeed.