Corporations often have an entire department dedicated to finances or even third-party financial services they outsource to. But a small to medium-sized business may not have that kind of luxury. So how can you ensure that you make your capital last and use it the right way to grow your business?
Here are the essential steps in creating a budget for your business:
- Know your annual revenue – If you don’t know how much you make, there’s no way to create a budget.
- List your fixed expenses – This may include things like rent, payroll, taxes, certifications, insurance, and the like.
- Determine variable costs – These are expenses that vary from month to month, such as utilities, supplies, etc.
- Estimate one-time costs – These are often larger expenses (such as buying a new piece of equipment). You will want to save up and factor in the price over the course of a number of months, so your budget doesn’t take a big hit all at once.
- Set aside funds for emergencies – Whether it is emergency repairs or some other unexpected costs, you should be setting money aside to cover it rather than scrambling when emergency costs inevitably arise.
Now you’re ready to begin putting together things like a profit/loss statement or future budget projections. Of course, these should be reviewed and adjusted each year (or more often, as needed).
Don’t Forget to Leave Room in the Budget for Supplies
A1 American is here for hospitality businesses, fitness centers, hospitals, and more, with top-quality supplies that keep your business running without breaking the budget. Give us a call today at 833.205.2200, and let’s get your order started.