06 15 2016

06 15 2016

Smart small business budgeting techniques

Running a small business can often mean operating with slim profit margins and inconsistent revenue streams, potentially leaving you short of working capital when you need it most. Because of this, it’s vitally important that you carefully craft your budgets to ensure your cash inflows match your outflows. Without accurate budgeting techniques, you may find your small business struggling to reach your company’s milestones for growth.

Implementing smart budgeting techniques offers many benefits for small business owners. Putting in a little extra time and effort during your budgeting meetings to create a framework and strategy for allocating your resources helps you maintain profitability and create realistic and achievable goals for future growth. Consider these techniques to create a smart small business budget:

 

Utilize historical data

The best way to effectively project your future financial situation is by reviewing and analyzing your company’s historical data, the Houston Chronicle noted. With this crucial information, you can detect patterns based on actual past performance, whether it’s noticing revenue dries up every year around the same time, or realizing that each year your budget for office supplies is consistently below the amount staff members end up spending. This lets you adjust your current budget forecasts to more closely align with empirical historical data.

 

Know where you got your mega-customers

According to Entrepreneur, chances are half of your revenue most likely comes from the top 20 percent of your clients or customers. Unless you have a solid grasp on why these mega-customers chose your company and continue to do business with you, you’ll be unable to effectively leverage this information to attract similar customers. Worse, if you fail to retain one of these mega-customers, you could potentially lose out on a significant chunk of your revenue. Be sure to cater to the high rollers while also figuring out what you did to snag them in the first place. Even better, hooking another one of these whales can create a great opportunity to scale operations without necessarily needing to increase spending by too much, thereby boosting your profit margins.

 

Incorporate budgeting software

Increasingly, business of all sizes are embracing advanced budgeting software to assist in maintaining accurate spending and financial projections. With more granular data on the exact costs and expenses necessary to operate your small business, you can make more precise, data-driven decisions on what best suits your goals. Further, since most budgeting software is now cloud-based, you can easily tinker with line item expenses from any mobile device with an internet connection to find new ways to trim waste, optimize your supply chain and wisely distribute your resources where they’re needed most.

 

Don’t forget time is also money

The age-old adage that time is money might be so familiar to some people that they no longer take its meaning to heart. But you should keep this important phrase in mind, since too often small business owners fail to include time into a budget plan, Business News Daily reported. Underestimating how long it will take to complete a project or not scheduling a deadline out far enough into the future can significantly increase labor costs, eat away at your delivery estimates and negatively affect future orders. By treating your time as if it was money, you can more effectively set proper deadlines and ensure you’re not wasting time and money.

 

Consider a merchant cash advance

Sometimes, no matter how carefully you craft your company’s cash inflows and outflows, you can still find yourself short on cash or struggling to keep the doors open. Incorporating alternative funding into your business plan can create a bit more breathing room in your budget and ensure you have necessary cash to bridge any financial gaps during tough times.

Find Out How Much Funding You Qualify For

Fields marked with an * are required
By clicking this button I agree to all terms and conditions.

Terms & Conditions

General Acceptance

Any applications submitted electronically shall have the same force and effect as if the application bore an inked original signature(s). The above information, together with any accompanying financial statements, schedules, or other materials, is submitted for the purpose of obtaining credit and is warranted to be true, correct, and complete.

 

US Patriot Act:

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person and business that seeks a business loan.  What this means for you: When you apply for a loan, we will ask for your business name, address, and Tax Identification Number.  We will also ask for your name, address, date of birth, and other information that will allow us to identify you.  We may also ask to see your driver’s license or other identifying documents.

 

For Loan/Merchant Services:

The Merchant and Owner(s)/Officer(s) identified in the application (individually, an “Applicant”) each represents, acknowledges and agrees that (1) all information and documents provided to National Funding, Inc. (“NF”) including credit card processor statements are true, accurate and complete, (2) Applicant will immediately notify NF of any change in such information or financial condition, (3) Applicant authorizes NF to disclose all information and documents that NF may obtain including credit reports to other persons or entities (collectively, “Assignees”) that may be involved with or acquire commercial loans having daily repayment features and/or Merchant Cash Advance transactions, including without limitation the application therefor (collectively, “Transactions”) and each Assignee is authorized to use such information and documents, and share such information and documents with other Assignees, in connection with potential Transactions, (4) each Assignee will rely upon the accuracy and completeness of such information and documents, (5) NF, Assignees, and each of their representatives, successors, assigns and designees (collectively, “Recipients”) are authorized to request and receive any investigative reports, credit reports, statements from creditors or financial institutions, verification of information, or any other information that a Recipient deems necessary, (6) Applicant waives and releases any claims against Recipients and any information-providers arising from any act or omission relating to the requesting, receiving or release of information, and (7) each Owner/Officer represents that he or she is authorized to sign this form on behalf of Merchant.(8) I consent to receive direct mail, faxes, and e-mails sent by National Funding and its affiliates for the purposes of transmitting account updates, requests for information and notices, and (9) this request is for business and not for consumer purposes.

 

For Equipment Services:

I hereby certify: (1) the information provided is true and correct, (2) you are hereby authorized to investigate all bank, credit, and trade references, and said references are hereby authorized to release any requested information to you or your nominee, (3) such authorization shall extend to obtaining personal credit profile in considering this application and subsequently for the purposes of update, renewal or extension of such credit or additional credit and for reviewing or collecting the resulting account, (4) this information may be transmitted by us to you and by you to underwriter(s) for the purpose of granting me credit, either electronically or manually, and that by submitting this application, I take full responsibility for transmission thereof, (5) I am over 18 years of age, (6) I acknowledge my rights under the Fair Credit Reporting Act, (7) I consent to receive direct mail, faxes, and e-mails sent by National Funding and its affiliates for the purposes of transmitting account updates, requests for information and notices, and (8) this request is for business and not for consumer purposes.

The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status or age (provided the applicant has the capacity to enter into the binding contract); because all or part of the applicant’s income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. If for any reason your application for business credit is denied, you have the right to a written statement of the specific reasons for the denial. To obtain the statement, please write to National Funding Inc., 9820 Towne Centre Drive, San Diego, California 92121.  Funding amount and credit approval is subject to a full credit profile review.