Everyone says you need a Budget, but is that true? Do you really need a budget?
I say yes and here’s five really good reasons:
1.You’ll always have enough cash set aside to pay your bills on time.
You’ll know exactly how much cash you need to pay your bills and when you’ll need it. So you won’t be tempted to run out and buy a new pair of shoes or that super duper printer/scanner/fax machine despite the fact there’s money in the bank. You’ll know that you need that money to pay the rent next week. You’ll also know that you need some more money to pay the quarterly power bill and the yearly company registration fee so you need to ring some of your debtors so that you get paid in time.
2. Setting your sales price is easy
You’ll know exactly what it costs you to make your product or provide your service, so you just need to add in your profit margin and you’ve got your sales price. Too easy!
3. You’ll know in advance when you need to run a promotion or concentrate on getting new customers.
Because you know what your income and expenses should be, you’ll also know if the reality doesn’t match up to what you expected. An if that happens you’ll know that you need to do something about it. Either tighten your belt and reign in spending or run a promotion and focus your marketing to get new customers.
4. You can take a holiday every single year
Because you know where you’re going with your finances you can plan for time off and know that the money will be there to actually go on holiday with your family.
5. Knowledge is power.
Do the work to calculate exactly what your expenses are and add in how much profit you want. This gives you your Sales target. Once you know this you can plan your sales strategies, work out what products or services you want to sell and how many of them you’ll need to sell to hit your goal. Knowledge is power, and what this means is that you won’t be flying blind any more.
Remember, you get what you focus on.
If you want to have a fantastic year and have a successful business then you need a budget!
Listen to your numbers, read their story and watch your business Bloom!