Summer is the time of year when many small business revenues can slow down, but expenses don’t change. Does your budget have the flexibility and cash flow planning to cover your expenses during the slow months?
Here’s a quick & dirty planner for basic budgeting to help you figure out when you need money and how to save for it.
Start by listing your expenses for all 12 months of the year. Use last year’s numbers as a guide, and adjust for any increases. For example, if you use the mail, the price of stamps increased last year, so even if you send the same number of pieces of mail, your postage expense will go up. Some line item expenses may include:
- Contractor pay
- Advertising/marketing/public relations
- Participation in trade shows, conventions, etc.
- Office supplies & equipment
- Professional services such as cleaning, security guard, taxes, etc.
Next, make a list of monthly income. This can include:
- Earned interest
- Capital gains
Add these up to determine the monthly income and expenses your business can expect on a monthly and annual basis. You may decide to also examine your budget quarterly, if that is helpful to you.
The last piece of this is to keep close track of each and every expense or incoming penny each month. Then compare the actual figures to your budget to ensure you’re not spending too much in any particular month, and to see where you need to save revenue to cover expenses during low-revenue months.
The key to ensuring that you can always meet your expenses is to remember, whenever your revenue is greater than your expenses, save that extra money. Many people will impulsively use any extra to expand, or to invest in marketing or to upgrade equipment. But unless those expenses are built into your budget, you’ll find that you will be short on cash during the slow months.
If budget planning and expense reconciliation is not for you, get it off your plate! It’s crucial to the success of your business, so get someone else to create a budget and keep track of everything. A bookkeeper can help you set up your business budget (or even a personal budget!) and can track and file your receipts and invoices every month so you are always on top of cash flow. You’ll never find yourself short again!
If you feel overwhelmed or stressed out when working through all of this, a virtual assistant can help. Want to get your budgeting all set for the rest of the year and into 2015? Contact a virtual assistant today and get your budget done!