It’s that time of year again! And, no, I’m not talking about the holidays. I’m talking about year-end! It’s time to start thinking about the new year. Where will your business be at the end of next year? What changes do you hope to make in 2015? What are your operational goals? What are your hiring goals? What are your financial goals?
As we near the end of the year it is time to start thinking of setting goals for the new year. One method of setting your financial goals should take the form of a budget. And, no, a budget does not just mean you have to cut down to the bare minimum of expenses (though you may choose to do so). A budget is a formal method of setting goals for the money in your business.
Many people can be intimidated by setting a budget for their business, but budgets can take many forms. The most important thing is to DO one. How you go about it can be simple or complex, so don’t let your preconceived notions of budgeting scare you away from doing it. For a simplified method of budgeting, break the process down into 5 steps. This can help reduce your anxiety.
- Review your current year financials (by month).
- Review your sales. Review your pricing. Set your budget for sales and cost of goods sold.
- Review expenses. Determine if there is a need for any cuts. Set your budget for expenses.
- Set Stretch Goals.
- Review your budget and set a monthly meeting for reviewing and managing to your budget.
Our blog series next week will cover one step per day. Get excited!