Let's Get Your Budget Up to Scratch for 2021
Posted on 2nd December 2020 at 13:00
This year has been a difficult one and we really do hope that you’ve managed to keep busy. Whether your business is currently thriving or you’re going through a relatively quiet period, it’s essential that you know where you stand financially.
Many business owners think they know their numbers but it’s very easy to forget about costs that pop up only occasionally. That’s why we’re here to help you budget effectively throughout 2021 and make it your year of success.
What does a budget include?
Your budget should be comprehensive and cover multiple criteria, such as:
All upcoming expenditure, including rent, wages, insurance, subscriptions, business services, travel costs, equipment, utility bills, and even small purchases such as stationery and kitchen supplies
Changes that you want to make to your business over the next year, which could be anything from slightly increasing your marketing spend, to moving into new premises or running a recruitment campaign
Projections of how your market could change, both positively and negatively
Your overall goals for the next twelve months in terms of sales, staffing, general performance and the ideal return on investment for any expenditure
If you have employees, determine who will be in charge of departmental spend and give them a foolproof budget for their areas of responsibility
Why is this important?
When done properly, a budget gives you total control over your finances. As a result, you know what’s coming out of your account and when, plus a little wiggle room will be factored in for when unmissable opportunities arise, such as an advertising discount or the joining of a new networking group.
By maintaining a clear budget, you’ll also never have to worry about not being able to pay bills and wages, which will further strengthen your reputation as both a business and an individual.
Make decisions quickly and effectively
Every decision you make for your business should be given in-depth thought. Once this is done, you don’t want to have a silly problem like lack of funds preventing you from implementing the action or change.
When you get into the routine of having a detailed budget in place at all times, you gain more confidence and can make key decisions more easily in line with your objectives.
Every penny spent should be worthwhile. Sometimes it will be for a necessary resource, such as staff and commercial premises, whereas on other occasions the sole purpose of the expense will be to make money back in the longer term.
Monitoring the performance of your costs and checking to see if they’re achieving the desired ROI is crucial if you want to stay on top of your finances. It also helps you to fine-tune specific areas of your budget and improve their outcomes.
Keep your cash flowing
Regardless of the size of your business, cash flow should always be a top priority. Budgeting helps you to decide how certain purchases are made, with a prime example being that you should buy anything that will appreciate in value and hire anything that will depreciate.
For instance, IT equipment and company smartphones immediately drop in value once purchased, so there may be changes you can make to your current setup, such as leasing equipment once your current hardware becomes obsolete.
Establish your budget for 2021
Start the year right with a crystal clear budget designed around sustainability and growth. To achieve this to the highest standard, call our Yorkshire office on 01482 235575 or our London office on 0207 885 0605. Alternatively, you can fill in our contact form and one of our finance specialists will get back to you right away.
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