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As much as we would all like to believe that our business is going to bring us millions within the first year, with minimal effort, we do have to be realistic about some things, and even the most successful businesses have to have a budget. Here are some top tips for budgeting within your business.

Ask for help

For many of us, we started up our business because of a passion we have for our trade or industry, and not necessarily because we are experts in the world of business and finance. Thankfully, some people are experts in this field, and so it’s a good idea to hire one of those to help support you in making the right decisions. For example, LBW business and wealth advisors can do more than just your accounting – you can also get help with financial planning, auditing, and tax consulting.

Be cautious

There are a lot of things in a business where it makes sense to take risks and dream big, but there are also areas where you have to be a little more careful. For example, having enough money in your business bank accounts at any one time, to be able to pay your employees severance pay if anything were to go wrong. Of course, you don’t want to think that there ever will be a time where you have to use this pot of money, but it’s wise to have it, especially after the past year with the Coronavirus and how that has affected businesses.

Look to the past and the future

A budget cannot simply be pulled out of fresh air. Look at your sales history, and make forecasts for future sales, in order to decide on your budgets. Consider where the current market trends are, and whether you have any plans for new products, or even retiring old ones. It’s also vital to think about cash flow – sometimes customers can take a while to pay and this can lead you to have issues with your own outgoings. Do you need to pay for some suppliers and vendors upfront? Or will it be on credit? What costs are you expected to pay in the next year and will these stay the same or increase?

It’s important to have a contingency plan in place for those unexpected things that crop up, such as random price fluctuations, to ensure you’re not left in a sticky situation. Having wiggle room on either side can take off a lot of pressure and stress and mean you can operate more comfortably.

Setting a budget can create a lot of stress as it involves planning for things that haven’t yet happened, but having the right people involved and focusing on the figures you already have, means you should be able to create a robust budget that allows your business (and your income) to grow steadily, without having to worry too much.