Article by: Kempton Park Accountant: Retha Brand
As a small business owner, you might feel that you simply don’t have the time to spend doing silly things like create a budget. You’re putting all of your energy into the day-to-day running of your business, trying to get it off the ground, or to maintain the momentum you’ve spent so much of your energy creating. Is this a mistake? How important is a budget anyway?
Here are 3 reasons why you should give budgeting a second thought:
How many people are you hiring? When can you hire them? What kind of coffee machine can you buy? Can you afford another printer? These are some of the questions you will find answers to within your budget. No matter what kinds of expense you are looking at, you need to be in complete control of your business at all times. If you are not aware of where you are and where you’re heading, making the right decision is impossible!
Maintaining a budget allows you to take and retain control of your business from a financial perspective. But there’s more to it than this. Budgets not only help you understand where you are today, they also help you project your company’s future as well as monitor actual performance against your predictions.
Budgets talk about what happened in the past and what is likely to happen in the future. Investors sitting on the outside, looking in, require a lot more information about a company’s financial health before choosing to put money into the business. Without a budget, they would find it almost impossible to gauge the health of a business and also to gauge how well it performed in the past. Investors will use that information to see whether they want to become a part of that business or not.
As a business owner, you might feel that the budget is the last thing that you want to spend your time on but the fact is, it should be one of the first! The budget is something that helps you chart your path forward as you’re trying to make your business grow. Done right, a budget can really be a major support for your business. Make sure you have a budget for your business to keep you on the path to success at all times.
Related articles: The importance of Cashflow Forecasting
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