Budget

New small business owners may run their businesses in a relaxed way and may not see the need to budget. However, if you are planning for your business’ future, you will need to fund your plans. Budgeting is the most effective way to control your cashflow, allowing you to invest in new opportunities at the appropriate time.

If your business is growing, you may not always be able to be hands-on with every part of it. You may have to split your budget up between different areas such as sales, production, marketing etc. You’ll find that money starts to move in many different directions through your organisation - budgets are a vital tool in ensuring that you stay in control of expenditure.

Cash flow Forecasts

One of the most useful bits of advice that established entrepreneurs give to people starting their own business is this: ‘cash is king’.

It doesn’t matter what business you’re in and how profitable it is, if you run out of cash, your business will struggle to continue. If you can’t pay suppliers you’ll have nothing to sell, and it’s a quick, vicious circle from there to insolvency.

A good business needs a positive cash flow, where the amount of money coming in to the bank account each month at least matches the amount of money going out.

This is something that needs to be monitored at every stage of business growth. Obviously if your business is going through a rough patch, you need to keep a very close eye on your finances.

If you require help and advice with your budget or cash flow forcast please click here