When it comes to creating a budget, it's essential to
estimate your spending as realistically as possible. Here are three
budget-related errors commonly made by small businesses and some tips for
avoiding them.
Not Setting Goals. It's almost impossible to set
spending priorities without clear goals for the coming year. It's important to
identify, in detail, your business and financial goals and what you want or
need to achieve in your business.
Underestimating Costs. Every business has ancillary
or incidental costs that don't always make it into the budget--for whatever
reason. A good example of this is buying a new piece of equipment or software.
While you probably accounted for the cost of the equipment in your budget, you
might not have remembered to budget time and money needed to train staff or for
equipment maintenance.
Failing to Adjust Your Budget. Don't be afraid to
update your forecasted expenditures whenever new circumstances affect your
business. Several times a year you should set aside time to compare budget
estimates against the amount you actually spent, and then adjust your budget
accordingly.
Call our office if you want to discuss setting up a budget
to meet your business financial goals. We're happy to help.
Barry Eisenberg, SCORE Counselor
Visit us at: www.scoresouthflorida.net
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