As a small business owner for more than three decades, I’ve experienced my own fiscal ups and downs. Here are five areas that I’ve identified as potential budget pitfalls, along with some tips to help you plan accordingly.
Whenever possible, choose a short-term lease over a five-year option. You can’t predict what the market will be like in five years, and that “great price” may cost you more in long-term rental expenses for a space that simply doesn’t suit your needs. Remember: sales aren’t consistent but rent is. Plan accordingly.
This is an area where business owners often under-budget, and it ends up costing them. As the owner, you have many hats to wear, but you cannot do it all on your own. Budget for a team and for staff training. This is especially important if you’re in an industry that experiences high employee turnover (such as food service).
Tech can take over your budget if you’re not careful. Don’t fall for every sales call or software pitch. There are many free or low-cost services that can help you maintain a reasonable IT budget. Determine what you really need, and find an IT service that can help you maintain your services at a reasonable cost. (I use GeekSquad!)
There will always be unexpected expenses, no matter how well you plan. Things happen. Make your budget, and then add an extra 10-20% as a buffer.
Pay your 940 and 941 taxes. Every quarter. It’s that simple.
One last tip: If budgeting is a consistent struggle, I suggest you ask for help. Fiscal mistakes, especially in a business, can quickly add up if you’re not budgeting properly. Find a mentor, take some budgeting classes, get a new CPA or financial advisor. Learning to balance your budget will not only help your business grow, it will bring you peace of mind – and that is worth the investment.