Could your small business budget use a little stretching in 2020? If you haven’t started planning already, now is the time to get ahead on your budget for the coming year. Your ability to manage your finances and stick to a spending strategy can help your business weather the ups and downs that will affect your profitability.
Take a look at our top tips to help you get a jumpstart on your end-of-year budget planning.
1. Review the Previous Year’s Budget
If you did your homework last year and created a budget for 2019, use it as a template to start planning for 2020. Review your budget allocations and compare them to your actual expenses to see what you got right and where you went wrong.
From there, you can add in any new expenses, remove old ones, review your current cash flow and projections for the coming year, and start crafting a budget that’s even more effective than the one before. You can also use free online planning tools for guidance, such asthese templatesfrom SCORE.
2. Focus on Building an Emergency Fund
Building a “rainy day” fund should be a top priority for small businesses (especially new ones), but too often this part of budgeting flies under the radar. This cash stash may help you get through business droughts or help you avoid taking out a loan when disaster strikes.
3. Review Your Budget Monthly
Budgets are never once-and-done documents. If you wait until the end of the year before comparing your budget to your expenses, you’re already behind the curve. This way, you always know where your money is going, where you need to make cuts, and where you can afford to spend more to remain competitive.
4. Lower Your Fixed Costs
You can’t predict worst-case scenarios or wildcard expenses, so focus on what you can control (usually your fixed costs). For example, you may be able to find a cheaper internet service provider that gives you a discount with a new contract. If you have subscription-based software, you may want to look at how that software is still meeting your business objectives and whether you can trim any of them from your budget.
One way to leverage your small business budget is to consider moving to a flexible private office space. Rather than paying rent on a traditional space in addition to fluctuating overhead, you can count on one fixed cost that includes utilities, internet, furniture, maintenance, printing, and all the other little expenses that can eat into your budget.
Office Evolution has more than 70 locations open, 140 units sold in markets across the country and is poised for further growth as the demand for affordable and safe, workspace close-to-home continues to rise.