Hardwood Floors April/May 2024

FINANCE BUSINESS BEST PRACTICES

ADOBESTOCK ©

Budgeting BASICS

The following are steps that any business can take to create and maintain a budget that contributes to financial success: List all sources of income and expenses based on business costs and earnings in previous budgeting periods. If you don’t have historical data available, start with the standard costs of a business in your industry and adjust those depending on your business’s unique needs. Account for all income and assign that income to go toward a specific category of expenses. This will help to decrease the likelihood that the business will spend more money than it should. Some costs that a business should budget include payroll, rent, utilities, materials, insurance, professional services, advertising and marketing costs, and any debt obligations. Make sure to include recurring expenses as well as any anticipated one-time expenses that will have a substantial impact on the budget. 1

A budget is a structured financial plan for your business. It identifies available capital, estimates your spending, and helps predict incoming revenue over a specified period, usually monthly, quarterly, or yearly. It provides a benchmark for long term financial goals and is, therefore, as important for a small business as for a large corporation.

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