There’s no getting around just how difficult it can be to grow a small business in 2017. Between rampant competition, a changing business landscape and the impact of social media and technology on modern audiences, staying afloat can be difficult enough —and experiencing growth can be an overwhelming challenge. More often than not, finances tend to dictate success in the small business stratosphere, and understanding how to budget properly has never been so important as it is today.
Looking to take better control of your small business financials? Here are five crucial budgeting tips to keep in mind at all times.
Divide Your Budgeting by Department
For those who run a truly small business that is characterized by one or just a few employees, it’s not uncommon for budgets to be “catch-alls.” That is, there’s a single budget used to fund every aspect of the business, from marketing efforts to subscription IT services and everything in-between. Even the smallest of businesses can benefit from dividing a budget by department, however, as doing so will add clarity to daily practices. This is also a great way to give more responsibility to employees heading each department, and you can expect to see marked cost savings once people start paying closer attention.
Implement a Cloud ERP Service
Handling the ERP financials of a business on one’s own can lead to plenty of challenges, and sometimes, it’s best to leave things in the hands of the professionals. Cloud ERP services can take a great deal of weight off your shoulders and allow you to focus on the aspects of day-to-day business that truly demand your attention. It may not be something you’ve thought about in the past, but once you see the difference Cloud ERP can make, you’ll never look back.
If there’s one budgeting mistake that small business owners make on a consistent basis, it’s underestimating how much their monthly expenses will turn out to be. There’s nothing worse than coming up short at the end of the month, and the only way to ensure this doesn’t happen is to overestimate what your costs will be. No matter what the project, hidden expenses always find their way into the equation. If you know to expect them, you won’t be caught by surprise.
Create a Business Savings Account
Many people have learned the hard way just how important it is to have a “rainy day fund” type of savings account in place. You never know when your car may need a whole new set of tires, for example, and not having that money available can be highly problematic. The same can be said for running a small business—anything might come down the road, and you need to be prepared. Putting away even just a small amount each month in a business savings account may prove to be a saving grace in the future, and the sooner you start, the more prepared you’ll be should something go wrong.
Dump Unnecessary Purchases
When you begin to look very closely at the purchases you make each month for your business, you’ll most likely discover expenses that can be deemed unnecessary. Perhaps it’s a coffee service that you could skip by bringing in your own beans, or maybe a paid newsletter subscription you haven’t even looked at in months. Take note of these expenses, and don’t hesitate to cut them.
Learning how to budget properly can be a difficult task, but it’s not without its benefits. Take the right steps, and you’ll be one step closer to succeeding as a small business in a crowded landscape.