Budgeting: 8 steps to create an adequate business budget

Budgeting: 8 steps to create an adequate business budget

If you’re a small business owner, you know that budgeting is essential for your success. But creating and sticking to a budget can be difficult, especially when your business is just starting. 

In this guide, we’ll show you how to create a budget to stay on top of your finances. We’ll also provide tips for dealing with financial challenges as your business grows. So whether you’re looking to get started with budgeting or want to improve your existing process, read on!

#1. Assess your monthly fixed costs 

Estimating monthly fixed costs is an essential part of creating a budget for your business. This can help you anticipate expenses and plan for future growth.

There are a few different ways to estimate monthly fixed costs. One method is to look at last month’s bills and calculate an average. This can give you a good starting point, but it’s essential to keep in mind that some months may be higher or lower than others.

Another way to estimate monthly fixed costs is to use historical financial data. If you have several years’ worth of financial information, you can look at trends and averages to get a sense of your monthly expenses. This can be helpful in irregular or seasonal businesses.

#2. Determine Variable expenses 

The best way to determine a business’s variable expenses is to sit down and review its past sales data. Specifically, look at the sales data for the products or services that generate the highest revenue and then identify the corresponding variable costs associated with producing those products or services.

For example, a business might sell two different types of products: a high-margin product that generates £10,000 in revenue per year, and a low-margin product that generates £5000 in revenue per year. In this case, the high-margin product would have much higher variable costs (e.g., materials costs, labour costs, shipping costs) than the low-margin product.

#3. Know about your one-time costs 

There are a few different ways to predict one-time costs for your budget. One way is to calculate how much you’ve spent in the past on similar projects. Another way is to estimate how much the project will cost based on average industry rates. Finally, you can ask for quotes from vendors or contractors involved in the project.

#4. Project revenues 

One reason to project your business’s revenue is to help you make strategic decisions about where to allocate your resources. Knowing which products or services are the most popular and bringing in the most revenue can help you decide whether or not to invest more money in them.

Projecting your business’s revenue can also help you keep track of trends and changes in the marketplace. If sales start to decline for a particular product or service, you’ll know that it might be time to rethink your strategy.

#5. Track your profit (or loss)

There are a few different ways to track your profits and losses for your business. One way is to track your income against expenses. This will give you an idea of how much money you are making monthly or yearly. Another way is to create a budget. 

A budget can help you keep track of where your money is going and where you may be able to save some money. It can also help you track your profits and losses over time. Lastly, you can use a profit and loss statement to overview your business’s financial health. This statement will show you both the income and expenses for a specific period (usually a month or year).

#6. Create a room for adjustments 

You can make a few essential adjustments to your budget to accommodate your business better. One is to carefully track your expenses and revenue so that you have a clear understanding of where your money is going. You may also want to consider scaling back on some unnecessary spending and reinvesting that money back into your business. 

Additionally, it’s essential to be mindful of the timing of your payments and invoices to avoid late fees or cash flow problems. By making these simple adjustments, you can help ensure that your business budget works best for you.

#7. Have an emergency fund ready 

One option for setting up an emergency fund for your business is creating a particular savings account and making regular deposits. This can help ensure that you always have funds available in case of an unexpected business expense. Another option is to keep a reserve of cash on hand so that you can quickly access it if needed. Whatever strategy you choose, be sure to make saving for emergencies a top priority so that you’re prepared for any eventuality.

#8. Revisit and re-evaluate your budget 

It’s essential to revisit your budget after you make it to ensure that it’s still on track and relevant to your current financial situation. Life can change quickly, and finances can fluctuate, so it’s always good to check in on your budget to ensure everything is still in order. Plus, as you get more experienced with budgeting, you may find that there are ways to improve your system or make adjustments to suit your needs better. So don’t be afraid to go back and take a second look at your budget from time to time!

Tips for dealing with financial challenges as your business grows

There are a few things to keep in mind when managing finances as your business grows. 

  • It’s essential to create a budget and stick to it. This will help you keep track of your spending and make sure you’re not overspending. 
  • Try to save money where you can, whether by negotiating with vendors or looking for ways to cut costs. 
  • Don’t be afraid to ask for help when it comes to financial planning – there are plenty of resources out there that can assist you in making the best decisions for your business. 

Follow these tips, and you’ll be on your way to successfully navigating the financial challenges of business growth!

To sum up: 

If you want to succeed in business, budgeting is a critical skill that you need to learn. And while the specifics of budgeting may change from year to year, the principles remain the same. Our accountants are experts in budgeting and can help guide you through the process so that your business thrives in 2022 and beyond. 

So what are you waiting for? Booka call with our team today!

Zyla Accountants is now a certified Profit First Professional organisation

Zyla Accountants is now a certified Profit First Professional organisation

We are glad to announce that our CEO Suzy Kerton has become a Profit First Certified Professional. She has been trained by top experts to give each client individualized advice on how they should invest their profits for maximum growth potential without any loss or risk involved!

What does it mean to be a “Profit First” company? 

For us, this means taking care of your financial needs and ambitions by providing you with an opportunity for success. We implement the principles in our own business so that we are able not only to provide services but also to build long-term relationships through transparency and integrity – because when people trust each other’s endeavours, they can grow together as partners on their journey towards reaching goals!

What does it mean when you say you’re a Certified UK Profit First Professional?

At Zyla Accountants, we’ve always strived to stay ahead of the curve and provide our clients with the best possible service. We’re constantly looking for ways to improve and simplify our operations, and one area we’re currently focusing on becoming a modern value-based consulting firm.

With the help of Profit First Certification, we can better guide our clients through this learning and ensure that they are getting the most value for their money. By leveraging profit first tools and brand association, we can offer our clients a more personalized service that is tailored to their specific needs. This will allow us to stand out from the competition and focus on creating customized solutions that will help them grow their businesses and reach their goals.

If you want to run your business more effectively, then finding a good accountant is essential.

Book a call with us to see how we can help you!

How can business owners promote positive mental health at work? (2022)

How can business owners promote positive mental health at work? (2022)

Mental health is a broad term encompassing everything from stress and anxiety to severe mental illnesses like bipolar disorder or schizophrenia. No matter what type of mental health issue someone is struggling with, it can be extremely debilitating and affect all aspects of their life, including work.

While there is no one-size-fits-all solution for promoting mental health well being in businesses, there are a few things business owners can do to make their workplaces more mentally healthy. 

Here we have talked about some steps which can help you create positive mental health at work.

#1. Create a supportive and positive work/life balance

Employees who feel stressed or overworked are less productive and more likely to make mistakes. When employees feel like they’re constantly balancing work with their home life, it can lead to feelings of frustration and resentment towards both work and family.

Employees who have a positive work/life balance are more engaged in their work and more satisfied with their jobs.

Some tips for creating a supportive and positive work/life balance for your employees include 

  • establishing clear boundaries between work and personal time, 
  • providing flexible hours and working from home options, 
  • encouraging vacation days, and 
  • establishing a workplace culture

#2. Offer employees access to counselling or therapy

In today’s fast-paced world, it’s easy to feel overwhelmed and like you’re never truly able to “unplug”. As an employer, one best thing you can do for your team is to offer them counselling or therapy. 

When employees feel like they have someone to talk to about the stressors in their life, they’re more likely to be productive at work. Counselling or therapy can provide a much-needed outlet for pent-up frustration and help run more smoothly for employees (and your business!).

#3. Add mental health coverage to a health insurance plan

Businesses large and small are beginning to realise the importance of adding mental health coverage to their employee health insurance plans. Studies have shown that employees who have access to mental health services are more productive, take fewer sick days, and are overall happier in their work

There are many reasons why Adding mental health coverage to the health insurance plan of your employees is a good idea. For one, it shows that you as an employer care about the well-being of your staff. This can help attract and retain top talent. Employees will know that they will be taken care of if they need assistance. 

#4. Never tolerate Ableist Language of any kind

Ableist language is any language that reinforces negative attitudes and beliefs about people with disabilities. This kind of language can be damaging to both individual employees and the workplace culture.

This language perpetuates harmful stereotypes about people with disabilities. These stereotypes can lead to discrimination and exclusion, both in the workplace and in society. Second, ableist language can be painful or offensive to people with disabilities, who may already face daily challenges and discrimination. 

#5. Overcome the mental health stigma in the workplace 

To reduce the stigma about mental health in your company, you should start by educating your employees about the different types of mental health illnesses and what they entail. You can do this by hosting workshops or informational sessions or providing online resources that employees can access at their convenience.

Ensure that you have a confidential way for employees to seek help if they’re experiencing symptoms of a mental illness. This could be through an employee assistance program (EAP) or simply by having a designated person who employees can go for support within the company.

#6. Encourage Physical Activity

Regular physical activity can reduce stress and help relieve tension. It also can increase endorphins, which have mood-boosting properties. Additionally, it improves sleep quality and quantity, which are essential for good mental health. Finally, exercise can help reduce symptoms of anxiety and depression. All of which can lead to improved mental health.

To sum up: 

Although it may seem like a daunting task, promoting mental health at work and physical well-being in your business is doable. And the benefits are worth it; not only will you be helping your employees to feel their best, but you’ll also likely see an increase in productivity and creativity as a result. So what are you waiting for? Start implementing some of these tips today!

For more information, reach out to our experts at:

Also read: How to convert from QuickBooks to Xero?

5 reasons why your small business has stopped growing

5 reasons why your small business has stopped growing

Are you finding that your small business has stopped growing? Are you feeling frustrated because you can’t seem to get over the hump and onto the next level? If so, don’t worry – you’re not alone. Many small businesses experience growth stalls at some point or another. But don’t despair! 

There are things you can do to get your business back on track. In this article, we’ll outline five reasons why your small business may have stopped growing and provide solutions to help get you moving in the right direction again. 

So read on for tips and advice that can help your small business thrive once more!

Are you seriously doing everything on your own? 

Are you one of those businesses that handle their marketing, accounting and customer support on their own? Well, then my friend, it will take some time to scale your business. The right is solution is to outsource non-core activities. 

When businesses outsource their non-core activities, they can avoid the costs associated with maintaining in-house staff and facilities. Outsourcing can also help businesses improve their efficiency and free up resources that can be better used elsewhere.

Another reason why businesses should outsource their non-core activities is that it can help them improve their focus. By outsourcing activities that are not essential to their core business, businesses can reduce distractions and concentrate on what they do best. This can lead to improved performance and increased profitability.

You’re not marketing your business effectively

If potential customers don’t know about your business, they won’t be able to make a purchase. Another reason is that if you’re not marketing your business effectively, you may not be reaching your target market.

A slow business can also be a result of poor customer service or unappealing product offerings. Finally, if you don’t have a solid marketing plan in place, you may find that your marketing efforts are inefficient and ineffective, leading to slow business growth. 

Your customers are not happy

Offering a positive customer experience is essential to keeping your business moving forward. If you don’t offer positive customer experiences, you’ll start to see a slowdown in business. There are a few reasons why this is the case. 

First, customers who have a positive experience with your company are more likely to come back and do business with you again. They’re also more likely to tell their friends and family about their good experience, leading to more customers coming through your doors. On the flip side, customers who have a negative experience with your company are less likely to come back and are more likely to tell others about their bad experiences, which can deter potential customers from using your business. 

You’re not working to reduce your customer churn

Churn, or customer attrition, is the number one enemy of businesses. It’s also been found to be the number one auger of a business slowdown. When customers churn, companies not only lose out on revenue from that customer but also the customer’s potential value to the company. In addition, it costs more to acquire a new customer than it does to retain an existing one.

That’s why it’s so important for businesses to focus on retaining their customers and keeping churn rates low. Some common strategies for reducing churn include:

  • Improving customer service and support
  • Offering discounts or other incentives to customers who remain loyal
  • Following up with customers after they make a purchase to ensure they’re satisfied
  • Regularly communicating with customers to keep them updated on new products, services, or promotions
  • Conducting surveys and gathering feedback to identify areas where your business can improve

You’re not continuously innovating 

When you stop doing innovation in your products/services, you stop growing. This is because innovation is what fuels a company’s growth and sets it apart from its competitors.

Without innovation, a company will slowly lose its competitive edge as other companies catch up and begin to offer similar products and services. To stay ahead of the competition, a company needs to continually be introducing new and innovative products and services that will capture the attention of consumers. If it fails to do this, it will eventually fall behind and be forced to close its doors.

However, there are ways to improve this situation. Here are a few suggestions: 

  • Keep an eye on the competition. See what they’re doing that’s working well and strive to stay ahead of them.
  • Encourage creativity and risk-taking within your team. Create an environment where new ideas are welcomed and celebrated.
  • Be open to feedback, both positive and constructive. Use it to help shape your products and services moving forward.
  • Always be learning. Whether it’s through attendings conferences, reading industry news or taking courses, staying up-to-date on trends. 

To sum up: 

So, if your small business has stopped growing, it’s time to take a step back and look at what might be causing the stall. The five reasons we’ve outlined here are some of the most common culprits – but they can all be fixed with a bit of effort on your part. 

Are any of these issues holding your business back? Let us know so we can help!

Also read: How to convert from QuickBooks to Xero?

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