Managing a business means a lot of financial numbers work to keep everything up and running smoothly and your business budget should be able to flex and change as your needs do. Budget changes can happen in good or bad times to help you grow or weather a slump. Either way, knowing what steps to take to transition your budget as smoothly as possible can help keep you from getting in over your head.
Determine Why You Need a Change
The first step is to determine why you need a change. This can help inform other steps and give you a good place to start your market research. You will want to determine how close your old budget was before you start building a new one as well as which areas need adjustments. For instance, if your budget was fine for monthly bills and failed at emergency savings, then you will know that you need to find a way to tuck more money in your savings. It is also good to look at ways to optimize your market analysis as well as employee performance to stay on budget.
Make a Spreadsheet
Chances are that your business budget is already on a workable spreadsheet, but if not, you should find a software solution that lets you make changes to different areas and see how that affects the budget. Playing around with your spreadsheet is a good way to visualize how small changes can add up to big savings.
Schedule Budget Reviews
The more frequent your budget reviews, the more likely you are to catch little discrepancies before they become big problems. After implementing a new budget, it is a good idea to review it monthly for a quarter and tweak it as needed. You can then review it quarterly for a better idea of where your company stands and how you can cut costs.
Look for Cost-Saving Strategies
Knowing where your budget stands on a regular basis through frequent reviews can keep cost-cutting strategies fresh in your mind. This can inspire you to find less-expensive alternatives to your suppliers, eliminate products that do not sell and even take better advantage of payment terms. For instance, if you find that you are paying too much for your company’s internet and phone plans, you may be able to bundle the plans together and save on the bill.
Your business budget will need a frequent review and changes to weather the ups and downs your company goes through as you grow. If you can change one small thing every month or quarter after a review, then you can more easily transition to a new budget instead of making drastic changes each year.