Top 5 Considerations As You Make Your 2019 Small Business Budget
2019 could be your year to see those projected growth figures, but what’s going to get you to your goals isn’t marketing alone — it’s budgeting. Creating a budget lets you see where you put your money and exposes holes where you could put more money for bigger profits and gains. As you start to make your 2019 small business budget, consider these five factors to set yourself up for bigger success in the New Year.
1. Pick a Format
There are many templates available for small business budgets. This one from Intuit Quickbooks is available for free via Google Sheets and has a nice summary tab to review after you start entering figures. This other one from Microsoft Office focuses more on expenses, which can be good if your business struggles to grow profits. No matter which template you use, deciding how you’ll format your budget is an important part of sticking to your plan for the New Year.
2. Look at Revenues First
Before you start trying to budget your spending, look at how much you estimate you’ll earn. Knowing your revenue figures will help guide your decision making as you move to the expenses portion of your budget.
Be realistic with how much you plan to sell. Although it sounds nice on paper to plan for a 15% increase in revenues, it might not be realistic. Be conservative with your approach, so you’re sure you’ll be able to spend money you have in the bank, and lower your risk of going in the red.
3. Think About What’s Stopping Your Growth
While you’re evaluating your revenues, look closely at what could be stopping you from seeing more growth. Are you lacking a skillset on your team to help you generate a new line of revenues? Do you need more marketing to get your business in front of more people? Compare your sales estimates with your business model and strategy to find any areas where you might be able to invest in order to grow.
4. Categorize Your Expenses
As you start to drill into the expenses part of your budget, categorize your spending into three areas. The first is necessary spending. This is the section where you put your payroll, overhead, and other non-negotiables. The next section is your advertising. You can tweak your advertising budget to your needs, so it’s nice to look at it separately from other expenses. Finally, look at the nice-to-have costs. These costs include conferences and other trips that could happen but don’t have to if you’re not meeting your projected growth figures.
5. Make Your Plan
Once you have your budget in place, make a plan for how often you’ll review it. Budgeting is a continuous exercise and one that shouldn’t be done annually. Remember, you cannot plan for everything. Make a plan for when you’ll revisit and reevaluate your budget throughout 2019, so you can be sure you’re taking everything into account — wins, losses, and unexpected events.
As you start to practice smart budgeting, you’ll increase your speed and efficiency. The goal is to get in the habit of running through these five considerations on a regular basis, so you keep your small business on track.