To protect against volatility in revenues, expenses and unpleasant surprises, creating a budget is vital. Protect your business by creating a budget that works:
- Develop an emergency plan – understand and identify the risks of your particular business. Setting aside funds in-case of natural disaster or adjusting your insurance, are types of protection you can put in place. Being able to assess and understand what can go wrong in the environment you operate in. Prepare for potential regulatory or legislative changes that could arise; for example: taxes, health care, overtime pay, minimum wage.
- Overestimate how much time each project will take, if your business revenues are based on time. Completing early, you will be seen as efficient; if on time, as giving reliable estimates.
- Being able to anticipate potential changes in overestimated expenses.
- Understanding your sales cycle to plan for off-season sales. Increase marketing budget for downtimes.
- By using the latest data to plan investments for growth based on financial forecasts.
- Continually revisit your budget; make it flexible to ensure it grows with your business, always including unforeseen expenses and emergency funds.
- Regularly saving funds for unexpected expenses and taxes.