Why Do I Need to Budget??

I work with a lot of clients each month, and a very small percentage of them create annual budgets, and really that’s only because I encouraged them to!  Many people don’t think a budget will help them, are scared they will not be able to stick to it, or just don’t know how.  Here are a few reasons to overcome those fears and get help budgeting!

Cut Costs

Budgeting can help you cut costs, increasing your bottom line.  When you budget, you look at your past Income Statements and use them to plan for next year.  By analyzing prior periods, you can analyze what your expenses are and determine whether you need them or not.

Budget

Reach your Goals

Whether you are looking to expand, sell your business, or just keep things going as they are, creating a budget will help you reach your goals. You will know each month how much revenue you need to cover your expenses and meet your goals. If you want to expand, you may need to save money to renovate a new space. Or maybe you haven’t been paying yourself and want to start this year. Or perhaps you’re finally looking to retire soon and want to make sure you have outstanding financial statements to help with a sale.

Plan Ahead

We have learned a lot over the last couple of years, but a big lesson lots of business owners have learned is that you should always be prepared. Many businesses had to close their doors during the pandemic, but I have seen many that could have made it if they had been more prepared. Having a savings account is always a great thing to have and something you can budget for. Having a budget and plan for the future can help you get funding if needed. And budgeting can help you keep costs down and raise prices if needed, bringing up your bottom line and help keep more money in the business!
 
There are so many more reasons why budgeting can help specific businesses, but these are just some general ones for all small business owners.  Next week we’ll talk about how to start building a budget.