For a business to be able to fund their operations, expand the
business and generate income, it is important for them to incorporate
and follow a budget. Without one, a business can run the risk of
spending more money than they are making, as well as not spending enough
to help the business grow and compete. Having a budget in place is how
Margaret Kronfield, BK Enterprise’s company director, has been able to
keep the company running and continuing to grow.
While every business has its own process, situation, and way of budgeting, there are several steps that can be taken to create a realistic business budget.
While every business has its own process, situation, and way of budgeting, there are several steps that can be taken to create a realistic business budget.
- While not all businesses are alike, there are some similarities. Check your industry standards to get an idea of what percentage of revenue should be allocated toward cost grouping.
- Create a spreadsheet that can help you to estimate what total dollar and percentage of the revenue will need to be allocated to raw materials and other costs.
- While the budget is based on estimating how much revenue you will receive and how much certain expense will cost, be sure to factor in some slack and be sure you have enough money in savings before expanding the business.
- Shop around for new suppliers to help save you money. This is best done before you start working on the yearly budget.
