Posted on 15/04/2016, 09:43
Owning a small business is not easy; having a good plan is a key requirement for success. Alongside your business plan, a well thought-through budget is a powerful tool.
A well-considered budget helps when making important decisions, and provides a baseline for determining whether a business is achieving its goals and objectives by providing a set of metrics to measure performance during the year. A budget helps businesses control expenses, manage inventory and cash flow, make key investment decisions, secure funding and attract investors / new partners.
Despite the important role a budget plays many SMEs don’t invest the time and effort to create and implement one. Some of the reasons business owners typically give for not having or using a formal budget include: “I don’t know how to”, “I don’t think it is a good use of my time”, “My business isn’t big enough” and “There’s no need – all the information is in my head.”
Here are 5 tips to help you put a budget in place:
Now look at your cost of sales, i.e the costs directly related to making a sale, and calculate your likely gross profit and gross profit margin. Gross profit is the difference between sales and the direct costs associated with sales and funds the business.
A working budget is one of a crucial set of tools in ensuring the success of your business. As Benjamin Franklin said:
“By failing to prepare, you are preparing to fail.”
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It’s not only Hagrid’s three headed beast of Harry Potter fame that goes by the name Fluffy. Marketing has been “accused” of being ‘fluffy’ by which it is meant that it is not measurable, not accountable and it is unclear how it impacts the business.Read More
So you have your marketing plan sorted out (if not, see our previous blog in this series for some useful pointers). Now you just need to make it happen.Read More