One thing you should be grateful about is that entrepreneurs don’t handle budgets like Government offices, in Kenya. These ones don’t even know what a surplus is. They would rather collude to purchase items at inflated prices rather than save money. Maybe it’s because this is your, tax, money at play.
Besides staying under budget, from to time, small business owners are also good at monitoring costs. What style do you use to keep everything in check?
Despite this and other excellent practices, there are business budget mistakes that keep cropping up. They will prevent you from realizing your potential. We think you can go far ☺️ if you want. So, let’s look at these bad habits to do away with:
1. Overrating your instincts
You should not rely on guesses to budget what prices will be or how business will perform. You gotta be that one girl who likes maths. This means going out of your way to compare prices. You should also use historical performance as the basis to budget for the future. So, if revenues have yo-yo’d between a number of figures in the last 3 months or so, you’ll be safer planning around similar numbers for your new month.
2. Not doubling up
There are two types of entrepreneurs. There’s the negative Nancy and the positive Pauline (I hate English). Which one are you? You can’t solely obsess over what will go wrong neither be naively optimistic. Why not combine both attributes to prepare better a business budget? Estimate results for a bad run of business and ones for a great time. We pray for you but the outcome will be more in the middle. This act will help you deal with a range of circumstances that life plans to throw at you.
3. Leaving loose ends
Would you live through house with make-up only halfway done? Yes, I know some look like that in the streets. But that’s not important.
Business budget means planning for everything. There are different types of financial records. You will be safest if you plan for all of them. They tell different stories about your business financial performance. For example, you don’t want to budget for purchase of stock but not how fast you will sell them. And for what it’s worth, this kind of data will help you monitor how your business is changing better.
We just made that word up. Anyway, you’re an adult. I presume you think hard about your future. Same for business. You not only have to remain aware about your long term prospects. You also have to break down timelines into bits that you can manage. Don’t be an entrepreneur who only thinks about paying the bills of literally tomorrow. You’ll never see the big picture if you live like so. Yet, we want you to upgrade gradually to your life dreams.0