As the new year opens, it is important to take a look at your budget and make some strategic decisions that will position your company for a successful 2019.
The process starts with having a firm grasp on your income and costs. As seen in the recent Entrepreneur's Startup Success Guide for 2019, this work lets you look closely at where expenses can be cut and focus on strategies for growing revenue.
Here’s a step-by-step guide to assessing your business budget.
1. Project Your Business Income
Set your projected monthly income, based on the past year’s results.
Take your gross annual revenue and divide by 12 (or fewer if your business is less than a year old) to get a sense of your per-month income. Younger businesses should use caution in forecasting future income as initial sales results are not reliable measures long term.
Many businesses have major seasonal variations in sales. Understanding these cyclical swings in revenue helps you to get a sense as to when expenses particularly might need to be tightened or expanded. As you plot your monthly income, you may want to adjust the monthly rates to account for these fluctuations.
Have you mapped out what your growth strategy is for 2019? You can base growth on several factors, including what you did for growth in previous years. Knowing what your projected revenue is for the year helps to adjust those monthly projections. It also gives you a baseline to compare projected versus actual income.
2. Assess Your Business Costs
It behooves any business owner to have a firm grasp on their expenses, which usually fall into one of these broad categories:
3. Evaluate Cost Centers
Now comes the hard part, taking a close look at your expenditures and determining what, where and when to consider cutting. Often what a business needs at its inception is not what is needed a few years or a few months later.
Here are a few areas where it really pays to examine opportunities to save money:
At Benetrends we help businesses with a range of services, including using 401(k)/IRA funds for business funding to operational functions like retirement plan and others. To learn more about how Benetrends can help your small business, schedule a consultation today.
Our mission is to make every Benetrends client our champion. For over 35 years, our Rainmaker Plan® has been tested and proven to work, providing a means for more than 17,000 entrepreneurs to achieve their dreams of business ownership, creating both jobs and prosperity. We are so confident in the Rainmaker Plan design that we stand fully behind our work, backing every client with our Rainmaker Guarantee.
Information provided by Benetrends Inc. is not intended to be used as legal or accounting advice, or as the sole basis for investment decisions, nor should it be construed as advice designed to meet the particular needs of an individual investor. Please seek the advice of legal or tax professionals, as appropriate, regarding the evaluation of any specific information, opinion, advice or other content.
© 2019 Benetrends, Inc. All rights reserved. Privacy Notice.