Practically every successful small business uses a budget, which is an estimate of revenue, expenses, and cash flow for a given period of time. In the current recession, having a budget is vital to a small businesses survival and success.
Budgeting is particularly helpful when you regularly compare actual results to your budget. This practice helps you determine what areas of your business are succeeding and which areas need attention.
I once told a business owner that not having budget and a good accounting system is like driving through a thick fog on the interstate at sixty-five miles per hour. You won’t know there’s something standing in the road until you hit it. A budget, used in conjunction with actual results from a good accounting system, will often give you the warning you need to take corrective actions to avoid hitting the obstacle.
Over the next few weeks, I’ll be posting a series of blog posts about budgeting for small businesses. I hope you find these posts informative and helpful to your business.
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