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Tags: budgeting | tips | small | business

Budgeting Tips for Your Small Business

Budgeting Tips for Your Small Business

Carol Roth By Sunday, 20 August 2017 05:24 PM EDT Current | Bio | Archive

One thing that virtually all small businesses have in common is a smaller budget than they would like.

But, fear not, the amazing CarolRoth.com contributor network of business owners, experts, advisors and entrepreneurs is here to share their best budgeting tips for small businesses.

Their answers are presented below in no particular order.

You may notice some similar ideas listed, but I kept them separate, as something in the way one is framed may resonate differently with you.

1. Make Your Credit Card Work

When creating a budget, it's hard to remember every single thing your business spends money on. I always recommend to use a business credit card for all of your transactions. That way, at the end of the month, you can take a look at your spending and then, make a budget from there. You can see exactly what you're spending, what you're spending it on, and how you can adjust.
Thanks to: James Pollard of The Advisor Coach.

2. The 10% Rule

One easy way to painlessly trim a budget is to use the 10% rule. Go through your business budget and pinpoint all of your variable expenses and cut them by 10%. Then, move that 10% into your savings or your profits. For example, if you budget $200 a month for office supplies, cut it to $180 and save the $20. You likely won't notice a difference and the savings can add up if done over multiple categories.
Thanks to: Craig Dacy of Craig Dacy Financial Coaching.

3. Budgeting For My Business

One of the easiest and most effective way to budget for a small business is to overestimate your expenses. Always round up when budgeting your business because it will give you a more realistic projection of your revenue and expenses. It's always better to account for under-spending because overspending has the potential to kill a small business. Finding your own technique for allocating business expenses will help you develop a refined budgeting structure.
Thanks to: Lisa Chu of Black N Bianco.

4. Local Businesses Love Barter

Look to barter with other small businesses for local services and products that you use. Depending on the type of business that you have, you might be able to barter with your account or your favorite pizza place. You don't have to barter for the entire amount. You can do half cash and half barter to cover your hard costs!
Thanks to: Bob Bentz of Rocky Point Media.

5. Start with Zero

Zero-based budgeting forces you to reevaluate and justify every expense on a granular basis against your current business strategy. You can increase profit by optimizing costs, not just income. Although it takes more effort, it is much more effective than blindly maintaining or even increasing your budget each year.
Thanks to: Jamie Broderick of JamieBroderick.com.

6. Power Down

Turning off the HVAC to my commercial studio when not in use has been a huge savings over the years. In areas with freezing temps, the heat needs to be set so the pipes won't freeze or burst. Painting the flat roof with approved white paint also brought the temp down 5 degrees in summer. Curtains or blinds account for a large part of a room's cooling when in direct sunlight, so that's another way to avoid expensive electric bills or to maximize heat exposure in winter.
Thanks to: Brian Bullard of The Paint & Wine Studio.

7. Don't Do Everything Yourself!

As a marketing and public relations pro, don't do everything yourself. This is best way of saving money. Look at it this way: to save money, you wouldn't perform surgery on a family member. It's the same thing with building a website, creating video or producing a podcast. Hire a professional who has experience in helping you create something for a client. What often happens when you do it yourself is either the client or you really hate the end result. Hire a pro and save money!
Thanks to: Mark Alyn of Mark Alyn Communications, Inc.

8. Divvy the Deposit

I usually set up project deposits to be divvied into four different accounts, budgeted as follows:

* Premium Paid Subscription Service (project-relevant data)
* A-Game (advanced conferences & executive training)
* Tech (maintenance)
* Murphy's Law (emergencies)

As an independent ghostwriter, it's imperative to my clients that I have the relevant data, know-how, functional technology & other means to ensure their deliverables will not only be on-point, but on-time, as well.
Thanks to: Annesa L Lacey, B2B Ghostwriter of @.l.interpretations.

9. Schedule AP Checkup

Growth often comes from attempting new things and attempting new things often involves added expenses. Enter the monthly service fee. These fees are used to make a service palatable to a company budget. But, whether the purchased service adds to company growth or not, the monthly fees often become just a number absorbed in your company's P&L - a blip on the credit card statement. Schedule quarterly reviews of your AP ledger to eliminate fees that are no longer necessary for growth.
Thanks to: Scott Toal of Killarney Metals.

10. Be a Smarter Printer

Printing documents has a higher cost than you might imagine - for the environment and your small business budget. As much as possible, limit how much paper you're using by printing on both sides of each sheet (this option is usually available in your computer's Printer menu), and filling in forms online rather than printing, completing and re-scanning them (there are plenty of free editing tools like PDF Pro that make this simple). You'll save money on paper, toner cartridges, and your time.
Thanks to: Marc Roche of Annuities HQ.

11. Partner with Your Manufacturer

We have learned to partner with our manufacturer on production. For those items we are low on sizes, we ask for production first and are billed for it. In this way, we are not paying for an entire production run at once and they can fill in to keep all their workers working!
Thanks to: Haralee Weintraub of Haralee.Com Sleepwear.

12. Advertising Budgeting Tips

First, find out how much similar businesses are spending on their advertising and take a look at what they are saying in their advertising. Then, set up your own advertising budget at a level that makes sense for you and work with an advertising agency to help you make your media and copy as effective as possible.
Then, continue to test and track and fine-tune your advertising copy and media to help make it even more effective. How much should you spend? As much as makes sense for your business.
Thanks to: Robert Barrows of R.M. Barrows Advertising.

13. Pay for Everything You Buy

Don't finance if you can avoid it. Let your business finance itself. Because we were able to grow organically, I can pay for everything we buy. We've got no loans and clean credit, so we now have net 60 terms with our vendors. When things get tight, I can call and ask for net 90. Because I’ve been so reliable, the vendors are happy to extend that to me.
Thanks to: LaDonna Snow of Snowflake Designs.

14. Keep "Sum" in Reserve

As you are building your business, one consideration that should be maintained from month to month is a reserve for those contingent elements that will arise unexpectedly, that could impede your business growth and progress. Make sure to budget a fixed amount or percentage of funds generated, then periodically throughout the year, review the contingency fund you have created to ensure that the allocation will be adequate to carry through the balance of that year.
Thanks to: Myles Miller of LeadUP.

15. Employee Benefits

The most meaningful way for a business to save money is by keeping salary costs down. The best and fairest way to do this is to be generous with equity to round out your employees pay packages. I can't compete with a high performing public company like Facebook or Salesforce on salary, but they can't compete with me in my ability to award employees with ownership in the business. This has the added benefit of aligning employees with the long term success of the business and keep them motivated.
Thanks to: Steven Benson of Badger Maps.

16. Don't Forget to Celebrate!

It's certainly responsible to make sure that you have enough money to pay your bills. Yet, it's also important to allocate funds to celebrate the successes - however small. The celebrations can be as simple as cafe coffee instead of home brewed or lunch out instead of brown bagging it. By doing this, you'll be reinforcing the great things you're accomplishing - and be less inclined to go on a spending spree because you've been denying yourself everything. So, go ahead, toast yourself!
Thanks to: Stacy Robin of The Degania Group.

17. Maximize Free Software

With both my speaking business and my social media agency, we use free software (and later, the upgraded paid versions) to help maximize our productivity.

We use Trello for handling workflows, Canva for creating professional-looking graphics, Evernote for sharing reference documents, iMovie for editing video clips, and of course, all the various social channels for doing business development.

Compared to even a few years ago, software tools are so cheap (or free). Take advantage!
Thanks to: Spencer Smith of Spencer X Smith Social Media.

18. The Best Budget Tip in 8 Words

"Profit is an opinion. Cash is a fact."
Thanks to: Victor Clarke of Clarke, Inc.

19. Lose the Office Gain 500 Hours

Getting ready for work and commuting to/from an office can waste an average of 2 hours per day, 5 days per week. Figure 2 weeks for vacation & that’s 50 workweeks at 10 hours of wasted time per. This works out to 500 hours (or 20.83 DAYS) of lost productivity! This waste can be eliminated— or at least mitigated— by ditching the physical office whenever possible and having employees work from home (or workation) while staying connected digitally via Slack, Skype, Drive, email, text and phone.
Thanks to: Jason Myers of The Content Factory.

20. A No-Debt Business

I strongly believe in running my business with no debt. Because we serve a number of clients with our virtual support business, we hold pre-paid retainers but don't draw from them until work is done. I always want to be able to pay back an unused retainer balance in the event of an emergency. All expenses are handled with the income we have--no borrowing. I can rest easy knowing I don't owe anyone anything for my business.
Thanks to: Beth Beutler of HOPE Unlimited.

21. Time is Money!

One of the biggest mistakes I made was forgetting to incorporate my time into a budget plan. Time is money, especially when working with people who are paid for their time.

Timing underestimation directly increases costs. Treat your time like your bank account.
Thanks to: Zondra Wilson of Blu Skin Care, LLC.

22. Discerning Taste

We test everything for at least a month before we invest in anything. It allows us the time to discover the benefits and the downfalls of each product or service. If we find it is useful and, more importantly, will help us deliver a superior service to our clients, we move forward. Conversely, if we find it's not worth the money or it has too many downfalls, we scrap and test another avenue. We continually evaluate the paid services and make sure to maximize our investment.
Thanks to: Stephanie Larson of AmpliPhi.

23. Use a Budgeting System

The best way to manage your budget is to *know* it and your major spending categories month over month. To be able to efficiently track and make use of this data, you'll need to employ a tool to assist in your efforts. Mint provides an easy way to visualize this data and you can see at-a-glance if you're over a budgeting amount in a certain spending category. Alternatively, you can use a tool like Quickbooks to see how expenses compare to profits.
Thanks to: Maddy Osman of The Blogsmith.

24. Don't Rule Out Outsourcing

One way small businesses and startups can save money is to outsource aspects of marketing. Marketing is a department any small business should and can have. Outsourcing content writing and finding marketing assistants abroad is a great way to cut costs. It’s also not difficult to find quality team members who are living in areas of the world with low costs of living who want to work remotely. This tip can save small businesses and entrepreneurs thousands in their budgets.
Thanks to: Eleni Cotsis of LinkedStartups.

25. Hire a Remote Team

Limit travel expenses by having remote team members in key cities your company does business. This has saved our company so much time and money previously spent traveling between clients. We've found that having a contact close by and more easily accessible is also more preferred by our clients.
Thanks to: Chloe Mitchell of The Social Select.
Carol Roth is a national media personality, "recovering" investment banker, dealmaker, investor, speaker and author of the New York Times bestselling book, The Entrepreneur Equation.

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One thing that virtually all small businesses have in common is a smaller budget than they would like.
budgeting, tips, small, business
Sunday, 20 August 2017 05:24 PM
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