Businesses and Budgeting

The purpose of budgeting is to Plan (goal-setting) and control (ensuring the company move toward the set goal) business.
Before we talk about why budgeting in business (especially for SMEs) is important, let me quickly remind us about the concept of budgeting.

An effective analogy to use here is a little girl’s (Susan) bedroom. When Susan’s bedroom is organized, neat and tidy, she can locate all of her possessions, and items generally do not get lost in the mix. However, when she neglects her bedroom, clutter accumulates. Each day that goes by without cleaning the bedroom, it becomes a more arduous task to accomplish. A messy bedroom is like a messy financial situation — tracking items becomes exasperating and organization, increasingly difficult.

A lot! Let talk about a few of them.

So, except you are gradually digging your company’s grave, please don’t budget! 😁

Let quickly talk about what you get when a business owner budgets too.

It’s important to remember that as your business grows, your budget will change. There are changes in your budget you won’t be able to predict — anything from increased investment in a new marketing channel or a workforce expansion to something more substantial like a change in the federal tax rate for small businesses. That’s why it’s important to stay as flexible as possible as you undergo growth in your Business. When one cost increases, find another one that you can decrease, at least in the short term.

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