The Coronavirus has put a monkey wrench into everyone’s plans. While you are down or on reduced hours it is a prime time to begin to put financial systems in place that will help your business be poised for growth once this downturn is over. I believe one of the first places to start is with a budget.
Running a business without a budget is like driving to a new place without a map. This map, called a budget, should reflect your business goals and will help steer you to financial success. Here are 4 benefits of having a budget.
1. A budget, just like a map, brings order to chaos and gives you permission to choose a financial path. A budget will not only help you set financial goals but also keep you focused on them.
2. A budget gives peace of mind and helps you sleep at night. If you follow your budget and manage your money you will not worry about where payroll is coming from, or if you will be able to pay your utilities or put tags on your vehicles.
3. A properly managed budget will build a cash reserve and help you weather economic down times.
4. A Budget enables you to make wise financial decisions. It can help improve your estimates because you know what your overhead costs are or to determine a markup rate. The budget also provides good data to help you determine an employee burden rate or the size of a loan you can afford.
These are just of few of the benefits of including a budget in your financial plan. As you will see in a future post, they really aren’t that difficult to put together.
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