Monday, October 05, 2009 by Jim
Budget budget budget. There’s no getting away from it.So instead of debating the rights and wrongs of Darling and Osborne and Brown and Cameron, the woes and foes and yes-and-nos of the political moves du jour, as everyone else everywhere is, we thought we’d give you some useful, fresh advice to do with budgeting.Here’s a little introduction on how to write your own 12-month budget for your business.
- Your budget is made up of three basic elements: projected cashflow, costs and revenues
- 12-month budgets work best when they’ve been drawn up on a month-by-month basis
- Work out predicted cashflow, costs and revenues for each month for the year ahead
- As a rule of thumb, halve what you expect your revenues to be and double your anticipated costs – it’s best to be on the safe side
- Once you’ve made your first draft, find ways to reduce costs
- Figure out any periods where cashflow might be a bit sticky and work out how to avoid problems – working out how much you need to save from times when your revenues are higher, for example
- Consult an accountant or anyone you know who has financial experience
- Refer to your budget frequently – at least monthly – and measure your progress
- Revise it if and as often as necessary
- Many successful businesses use a rolling budget that always plans the next 12 months – aim for this
There you go, you’ll be filling Darling’s shoes in no time. (Or Osborne’s, depending which camp you’re in.)
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