One place where many new business ownersunfortunately completely fail revolves around theirbudget- either the lack of a budget, the creation of avery improbable budget, or creating a decent budgetand not following it. Much like a budget made forrunning the home, the business budget is anextremely useful tool in helping to manage spending,to help gain and overall picture of business health andof course, is always necessary for basic accountingpurposes.

Here are the 1st top 5 tips for setting up a business budget…

1. Be realistic. When setting a budget for yourbusiness, it’s best to not do two things-cut yourself so short that it’s impossibleto take some amount of risk translatinginto reward, and on the flipside givingyour budget such a high value thatyou’re allowed to spend like it’s goingout of style. Know where your costs aregoing to be based on your business’sprojections for that year and plan onthat. Don’t assume that things arealways going to be bad, and don’tassume that the world is your oysterright away and spend, spend, spend.

2. Base your budget on how you, the owner, spends money and how that fits into how you run your business. This relies on thinking about your personal situation- nevermake a budget based on a prefab template. This may rely onhow you do you purchasing, how you bill customers, andother basic functions that are also unique to your business.

3. Accurately base your budget on your income projections.Income projections aren’t the same thing as a budget, sonever treat them the same. This is something that shouldbe made clear to every business owner but unfortunately, isa common basic mistake new small businesses make.

4. Include business savings into your budget and treat it as a basic expense.

5. If your business deals with cash, find a way to track that like a hungry hawk on a mouse. This is an area where most budgets fail.

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