One of the main reasons why small businesses fail is because they run out of money. For this reason, building a good budget for your small business is imperative to stay successful. Let’s talk about how to set a good budget for your business.
- Know your income. First, it’s important to know your income. When you are building a budget, it’s important to know what kind of money you’re starting with. If you have multiple streams of income, it’s important to tally up all of them and factor that into the way you build your budget.
- List your fixed costs. Next, to build a successful budget, you have to write down all of your fixed costs. Fixed costs can be recurring bills such as your energy bills, your lease, or any sort of ongoing expenses, including subscriptions.
- Estimate variable expenses. After you list your fixed costs, it’s time to calculate your variable expenses. Variable expenses can be hard to track, but if you can average them out over time, you can get a general estimate of how much you need to save for this category.
- Project cash flow. Finally, you have to estimate what your future cash flow will be. This should be rather modest because if you are not careful you can estimate too much and then end up losing money. A realistic projection will keep your finances on track.
A solid budget is imperative to the success of your business, but if you’re having trouble building a budget, you should seek the help of experts. The financial experts at Aspen Commercial Lending can help you build a budget for your business along with helping you secure any necessary funding you may need to get your business off the ground.