Reasons you need to set a budget for your business

Posted by AMG Coaching on August 13th, 2019

There are several ways you can run a business, you can just cruise along and hope for the best without any real structure or planning or if you really want to succeed then you need to be organised and have a proper business plan. The heart of a good business plan is your budget, setting a well thought out and realistic budget means you will be able to cope with any financial situation you’re likely to encounter. One of the best ways to prepare a business budget and plan is with the help of a business coach on the Gold Coast.

The businesses that don’t have a budget strategy are the ones most likely to fail regardless of the size or age of the business. Businesses that have both a short and long term business plan with proper budgets have a map of their future success and are fully able to utilize the opportunities that arise for them.

The Benefits of Budgeting

All businesses have obligations and expenditures such as:

• Rents, leases or mortgages
• Utilities such as power, gas, water, landline telephones
• Lines of credit or loans
• Suppliers credits and purchasing obligations
• Transportation costs
• Professional services
• Insurance
• Payroll expenses
• Taxes
• Advertising
• It services and expenses

When a business is unable to meet one of the above financial obligations because they have failed to implement and follow a workable budget, they are very unlikely to survive.

Any business that has no real idea where its money is coming from or where it’s being spent will be unable to take advantage of any real investment opportunities or make honest commitments to customers and suppliers.

The Benefits of Budgeting

Having a well thought out and constructed usable budget that your company follows means you will always know exactly where you are financially. You will know which areas you’re succeeding in and which areas need revision. Current and future possibilities can be recognised and capitalized on and your organisations objectives can then be achieved. Some other benefits are:

• Finding areas that need improvement or should be dropped
• The ability to set new sales goals
• The potential to attract new investors
• Opening new or improved  lines of credit
• The ability to make informed decisions about overheads and operation expenses
• Being well prepared for your tax obligations

Small business owners on a limited budget will find it’s extremely important to have a very strict budget and stick to it in order to be able to pay all of their business obligations. Failure to meet the many obligations would mean that there is a high possibility of having services like power and water cut off or being evicted.

One of the best ways to ensure a good budgeting strategy is in place is to use the services of a reputable professional business coach on the Gold Coast. They will help you determine the best approach and help you develop a suitable budget and business plan.

Today, small and medium businesses are very fortunate that they can take advantage of services like business coaches to help them develop a sound business plan and a realistic budget at very reasonable rates. Having a business coach can make all the difference between success and failure.