Budgeting ideas for small business owners

canstockphoto18632526Running a small business can be rewarding in many ways. It can provide a sense of independence, flexibility, personal fulfillment and income. Without properly managing finances all those benefits can easily fade and be replaced by headaches and debt.
Headway Capital, a small business credit provider, recently stated that almost 20 percent of small business owners are concerned about unexpected expenses and the impact they can have.

Creating a solid budget that accounts for both fixed and unplanned cost can help a small business operate in a functional profit generating manner. Taking advantage of discounts that Staples, Office Depot and Amazon provide for expected cost can help, yet understanding non-direct variables, overestimating expenses, knowing the sales cycle, and adjusting the budget accordingly is key for a small business to stay ahead and successfully predict when operating money may fall short. To see available coupons for stores like Staples visit: http://mamma.com/all-shops/

 

Non-Direct Variables

Variables that occur outside of the actual functions of a small business can unexpectedly increase operating cost. New government regulations, such as increases in minimum wage, changes in healthcare and environmental policies, can affect even small businesses. Economic changes that create unpredictable consumer habits can affect the cost of production materials and lower the amount of sales a small business has. Other than government and economic anomalies, natural disasters and social unrest can also create unexpected expenses. Change is constant in the world and being prepared for change can allow for a small business to weather through the storm.

 

Overestimating Expenses

In almost every type of business project something always seems to cost more than expected, or maybe something was missing in the original plan. Overestimating expenses allows for small business owners to maintain control when issues arise. Preparing for these occurrences makes handling the situations when they come to light less burdensome and keeps projects on time by prevents delays in production.

 

The Sales Cycle

Ever type of business has slow periods. Restaurant and retail business owners know that after New Years business slows down By recognizing when these periods occur small business owners can adjust the day to day operations to accommodate and keep cost low. Maybe less labor hours are needed. Keeping less product on hand can also lessen the amount of money going out the door.

Slow periods are also a great time for planning for the next boom in business. Knowing the sales cycle allows for an owner to make adjustments and plan marketing strategies that can better identify and attract customers in a new way.

 

Review the Budget

Believing that a budget is set in stone can cause businesses to miss out on revenue and not to be prepared for changes in the market. The budget should be able to flow and move with market trends. What may have been the perfect budget in the past may not meet the needs currently or in the future. Reviewing the budget frequently gives the ability to adjust month to month and year to year.

There is not a magic formula for dealing with unexpected cost that small business may face. Owners must be resilient and flexible to be able to adjust with political, economic and consumer trends. Planning ahead, knowing the market’s climate and being able to adjust will increase the chances for small business to succeed when unexpected occurrences and cost show up at the door.