Whether you are a start-up business or experienced owner limiting your costs is essential. Creating a business budget is not the easiest task and ensuring it is accurate and useful for your business can be tough. Our team will always guide you through what to include in your budget.
Coleman & Co offer advice to all businesses throughout the Lisburn area. As a result, you will always have a good understanding of your business budget and how to create it accurately.
Why Create A Business Budget?
Many businesses will have budgets for each department of their business or just one big business budget for the entire company. Despite this, some businesses will still fail to create a budget, meaning there is no limit on your spending. A business budget is essential for every business to continue to grow, whilst maintaining your success and a healthy profit. Budgets will:
- Allow Growth
- Cover Running Costs
- Lower Spending
- Prioritise your Expenditure
Although the main reason for budgeting is to reduce your costs, they will also offer several other benefits that improve your business. Having a good financial performance all revolves around your business budget and without the correct budget, there will never be extra money available for growth within your business. Whether you decide to save money on staff wages, product costs or running costs, a budget must be created.
Identify Expenditure
If your costs are already low and couldn’t possibly get lower, budgets may be useless. However, identifying where your main cause of expenditure is should help you create your initial budget. Whether you create a budget for every department or just one big one, it will still contain costs from different sections of the business.
Once you have identified where the most and least money is being spent, you can begin to create an accurate budget. Whether you increase the budget to spend more money in a more successful area or choose to lower the costs everywhere in your business, putting a limit on spending should always be completed quickly.
This will mean you only spend the money where payments are actually necessary. You will have more leftover money to use for growth or incentives, rather than wasting it on unneeded products.
Test Scenarios
Forecasting is a useful tool for every business to plan how much profit they can make over a period. But just one forecast may not be enough to ensure your budget is created accurately. Creating a range of cashflow forecasts, using different budgets in several scenarios, will help you identify what revenue each budget could bring to the business and what your possible minimum and maximum budget is.
Testing several scenarios allows you to identify which budget worked best for the business and create the largest profit margin. The best budget can be used as an experiment to monitor if an accurate profit is created. If this is a success, your business budget can be created easily.
Consider One-Time Costs
Not every cost within a business can be accounted for and sometimes surprise payments could be made. When this is the case, your budget should already be made with any potential one-time costs being considered. Therefore, adjusting your business budget for any one-off payments that could be made, your business will never be caught off guard with any financial issues.
Shock payments could occur at any time and if you are unprepared, it could seriously impact your revenue. Your financial performance as a business should always be a priority and creating your budget whilst considering all potential issues is a must.
Contact Us
Coleman & Co can help all businesses throughout Lisburn organise an accurate and successful business budget. If you require advice regarding your finances and business budget, our team are happy to discuss all your needs. Contact us today on 028 9266 3599 or fill in our contact form to make an enquiry.