It continues to amaze me how many businesses don’t want to create a budget. They would rather operate their business blindly than to create a profitable plan so they can prosper in the upcoming year.
Not having a budget can cost you a lot of time and money. Unnecessary time and money. So I am going to share with you five ways that a budget can save your business.
1. Creates structure
If you haven’t learned by now, creating or starting a business is very similar to a building structure. You have to have a foundation which is your business plan. You have to erect the pillars that will hold up the ceiling. These are your principles and processes you plan to implement in your business. And you have to have the ceiling to help keep you covered. And this is your plan around the inflows and outflows of the money in your business. Your financial goals.
A budget helps keep you covered and protected from the uncertain elements of business by preventing you from spending beyond your financial means. It is THE financial tool needed to help you reach your goals. It is the guideline by which your business will be funded and operated.
2. Makes you aware of your numbers.
Having a budget forces you to monitor your numbers regularly. It puts you in tune with all of your sales as well as your costs associated with those sales, your marketing, your payroll, inventory, fixed assets and cash flow that is needed to keep the business going. Knowing your numbers allows you to make informed managerial decisions based on solid facts, not fabricated ones.
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