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Tackling Budgets

March 29, 2011 Uncategorized Leave a comment

There are certain words that can strike terror into the hearts of people more deeply than hearing a chain saw rev up after watching a saw movie, one such word is budget. Take comfort though, we are going to approach this beast in a calm gentle manor and tame him to our purposes.

A budget helps you control your spending, it is an absolute necessity for those of us who run our own businesses. To do so successfully we have to have to know how much a month to allot for traditional advertising as well as digital advertising, how much for rent or utilities, how much to set aside for new equipment purchase, as well as website development. If you forget to account for things in your monthly budget then they can be unattainable when needed.

To start, set down and put down a list of all the things you should be addressing in your monthly budget. This is something unique to each person and situation, for example some businesses are home operated, this cuts out the cost of rent. Some have employees and product that must be accounted for. Don’t forget your advertisement budget, also important is your upgrade budget. I found it best to set this part of my budget aside in a savings account then when something expensive comes up that is required such as a website redo or a new laser printer for the office you can draw it from the savings account and you won’t be scrambling for the money last minute.

Now that you have your list of things, get a second set of eyes to look over it if you can find someone to help, they may think of something you forgot to add to the list. Then put a budget range next to each item on the list, I have found it is best to put the number I know is the bare minimum – the number that I would like to have to for that item. An example would be “O.D.D. – $250 – $750”

You are doing good so far, stay with me now! This part is the tough part, write down how much you can realistically afford to spend on all of these necessary things. Then start subtracting the larger number for each line and see where your total comes out. If it is in the negative, try starting over again and subtract the smaller numbers this time. If it is still negative, then comes the hardest part, weeding out or refiguring the numbers for each line to make them work. Sometimes this means cutting things out and taking on extra tasks, such as cutting out the lawn mowing for your business and doing it yourself to save $200 a month that you can instead use on your monthly newsletter. Keep working at it until you no longer have a negative number at the end. If you have a positive number, I recommend using more towards your advertising or online growth line items, or put it into a savings account and wait to see if it is needed somewhere.

There you have it, you have set a monthly budget. Now print out a copy for each month or make a spreadsheet and write in your actual numbers for each month and keep track of how they are matching up. Once you have established several months of budget expenditure tracked it will be much easier to reevaluate your budget and change the numbers to meet future goals. Especially those big goals like establishing your online social media presence which can be an overwhelming cost if forced all at once.