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.”
Good recruitment always starts with being clear about what you are trying to recruit for. This sounds simple but is rarely easy…Read More
From humble beginnings: Often the business starts with just the founder and perhaps an assistant. As the business grows, new people are brought in and they start to cover more and more roles.Read More
So, you have organised your board meeting, invites, the agenda and board papers have been circulated and everyone has arrived on time…. what happens now?Read More