Imagine jumping into the family car on the first day of a big road trip. You turn on the ignition and crank up the best mixed iTunes downloads ever made. Only to realise you have no idea where you’re meant to go. Let alone how to get there. Having no budgeting in accounting is a bit like this analogy.
This is what the majority of small business owners do. Many have no idea where their business is going. Or how it got to where it is now and how to reach the next step. Unfortunately, the next step for a lot of business owners is usually burnout. This comes with disappointment, disinterest and ultimately an unhealthy and declining business.
These results often lead to financial and emotional stress. Not bothering to implement budgeting in accounting is basically like driving your car blind with two flat tires. But it doesn’t have to be like this. Creating a budget is actually very easy and quite liberating. Setting small, short-term goals for your business to achieve, is one of the most powerful improvements you can make. The budget is the very first step to changing your bad business habits. It will give you greater control of your much-loved enterprise. And once you take the first step and start to see results, you’ll wonder why you didn’t do this before.
The most common mistake made when creating a budget is to simply input what they think looks good on paper. They should be looking into their business’ current internal systems and processes.
Looking at your business’s most intimate processes is actually the key reason why every owner should create a budget.
In essence, a well structured budget glues everything together. Since it should be able to highlight the inefficiencies and ineffectiveness of an operation over time.
Almost every business owner who starts working with us on their budget walks away after the process. They feel a weight lifted off of their shoulders. The have a clearer sense and a purpose as to why they started their business.
Take our advice, when you create your budget. Ensure that you approach it with a desire to improve your business internally. Do this rather than making yourself feel better with great looking numbers on a spreadsheet.
If you would like to know about creating a well intentioned and business changing budget, get in contact with us. Our Small Business Accounting Solutions are designed to help you get ahead!