As a business owner it is easy to get caught in the daily grind of managing your business, managing employees (if you have them), and providing your service (if you’re providing professional services to your clients). I know, I often get caught in the day-to-day workings of my business, and with all that has been happening in Hong Kong (protests and coronavirus), I have to be involved in providing a service to our clients. I can’t afford not to.
However, as a business owner with a growing business, I also know it is important to take that time out to plan, to set goals, to review the goals, and adjust the plan (as needed) – working on your business, not in it, can on some days, be hard to do. I know it can be even harder when it comes to preparing your budget, especially if you’re not a numbers person.
I make it a priority to regularly monitor my financial situation.
I allocate time to set my budget and review my business plan.
This way, I am able to identify available capital and estimate my expenditure and anticipated incoming revenue.
Having my budget defined allows me to measure performance against expenditure and ensure that resources are available for the projects that support the development and growth of my business.
With the end of the financial year coming to an end this month, are you preparing your budget for 2020/2021?
Here are some advantages to consider:
- Budgeting eliminates any unnecessary spending that is not part of the overall business plan.
- Budgeting ensures priorities are set. Money is allocated in a way that supports the strategic objectives of the business.
- A budget that is shared with the team allows all members to understand the priorities of the business.
- Budgeting paints a realistic view of the business. By reviewing whether or not you are sticking to the plan, it provides information that highlights the strengths and weaknesses of the business.
If you’re unsure how to get started with a budget, there are some options to consider:
- Use a business planning software such as LivePlan (which is what I use, and it syncs with my accounting software, Xero).
- Work with a business coach who specialises in financial planning and goal setting.
- Work with your business Accountant, if they offer this service. Some accountants will work with you for an extra fee, others don’t offer this service. It is something you’ll need to ask about.
- Work with a freelance CFO, and you’ll be surprised at how much they can make a difference. I worked with one last year to help me refine a few things with my accounts. I’d be happy to introduce you to a couple as I know about four freelance CFOs, and they are familiar with Xero if you’re using it for your accounting software.
It’s well worth taking the time to set a budget now. In the long run, it saves you time, and sets you up to achieve the success you want for your business.
If you’re overwhelmed, struggling to get things done, or recognise you need some assistance, organise a call with me to discuss your business support needs.