Ahh, the holidays … a time when money may be going out the door faster than it’s coming in.  If you have planned for this, you’re on track and are probably enjoying what the holidays are all about.  If you have not, it’s time to look forward now and build your budget for 2013 before this year is over – so you can relax a bit as you enter the new year knowing where you expect to be next year at this time.

Building a Small Business Budget For 2013

The first thing you need to realize is that most of the information you are going to need to build your budget for 2013 may in fact be sitting next to you, or at least close by.

The second thing you should recognize is that your budget can be as simple or as complex as you want it to be – as long as it makes good financial sense.   If this all seems overwhelming to you, no one ever said you had to build the entire budget in one day. 

Much like a good ball game, the best results come from single and double plays.  Don’t think you need a home run in 24 hours.

At Forbush and Associates, we have been helping businesses just like yours with accounting, bookkeeping and overall business consultation for more than ten years to help our community grow and prosper.  As our gift to you, we are offering these guidelines to jump-start your business in 2013.

Ready. Set. Go!

The easiest way to prepare a budget is to build it step by step – or perhaps just quarter by quarter – if that makes it easier for you to get through the process.

1)     Look at your business from the 30,000’ level.  With over 30 years of experience in providing financial advice to small and mid-size businesses, we have found that it’s common for our clients to be way too close to their businesses.  That’s why we always recommend that before you start the budget process, you take a global look at your future.

This first step is all about R & D: collect all the data you will need to help you project what your company may look like 365 days from today.

  • Look inside: Ask your staff for their insight: How do sales/expenses look for 2013?
  • Look outside: Is there a new competitor setting up camp down the street?
  • Look around: Has your product/service outlived its attractiveness or purpose and if so, what does your company need to do to meet your financial goals next year?

2)     Do your homework.  I know, you thought you got rid of that word years ago. However, it’s critical to completing the project at hand. Make a list of your common annual expenses and revenues.

Estimate your costs for insurance, rent, utilities, office supplies, payroll, etc.  Review the list with those who are closest to the subjects to see if you need to plan for any radical change. Ask questions. Is there a need to hire more staff?  Will new health care laws impact your employee expense?  What about marketing and advertising? And don’t forget to include costs and depreciation for your property and equipment.

And then there’s our favorite part: the revenue.  Work with your sales team to get a good birds-eye-view of what your revenue may look like for 2013.  Don’t forget to include dividends, interest and any other sources of income.

3)      Identify your ‘bell-curves”.  It’s not uncommon for businesses throughout the region to be dependent on tourism or weather.  If that’s the case with your company, you should build your expenses and revenues according to the seasons or reasons that guide your bottom line.  Plan for the obvious and chart your numbers accordingly.

4)     Do the math.  Although building a budget can seem overwhelming, it’s really just collection of pluses and minuses.  If you have done your research, completed your home work, and reviewed all of the content with a good ‘reality check’, the final step of building the actual budget may be the easiest step of all.

Remember:  A budget is simply a forecast of all of your business cash inflow and expenditures. It’s not set in stone yet it is a dynamic and vital component that will serve as your future’s guideline to success.

5)     Keep it handy and Compare.  Once you have completed the budget, make sure to keep it nearby.  Input the budget into your accounting system so you can easily track what is actual happening to what you created in the budget. Alas, don’t be afraid to change the budget in the middle of the year if there are significant changes, whether growth or reduction, in your business. Using the budget and making it a living, changeable document will help provide clear management insight into the success of your business.

Overwhelmed?  Need a little more advice? At Forbush and Associates we provide our clients with valuable business insight and solutions. In fact, we often learn about our clients’ companies so intimately, we become an integral member of their management team. And because we work with such a variety of businesses across so many industries, we see an evolving array of what works, what doesn’t and how to avoid potential obstacles.




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