A business budget will make running your business easier. I can’t help but wonder why business owners neglect to operate with one? Here are six reasons why a business budget is vital to your success.
Forbes.com contributed an article that said “8 out of 10 entrepreneurs who start a business fail within the first 18 months.” They gave five viable reasons, but I think they missed a big one: LACK OF BUDGET!
Believe it or not, the average small business owner does not operate with a budget. How do I know this? Well, I’ve been suspicious for years, but I finally decided to poll 30 of my Facebook friends that are either business owners or decision makers for a business (Shout out to everyone who helped me with this! Y’all rock!). Here is what I found out:
Even though 76.7% of business owners/leaders claim to keep up with their bookkeeping on a regular basis, only 30% of them operate with a detailed budget. That means more than half of the business owners/leaders that I know make important financial decisions on a whim.
Just like your personal finances, your business finances need guidelines. Don’t let the concept overwhelm you because it is quite easy to create a budget. In fact, if you subscribe to my blog, then I’ll give you a FREE budget template to help get you started. It is the same one I use to operate the roofing company. Don’t want to subscribe? Buy the template here.
Here are 6 reasons why you need a business budget:
- A detailed budget forces you to strategize and make goals.
- A detailed budget creates priorities for yourself and for the business.
- A detailed budget tells you if you are ready for the next big expense, thus making important financial decisions easier.
- A detailed budget keeps you from spending money you don’t have.
- A detailed budget sheds light on bad spending habits.
- A detailed budget helps you take control of your money rather than money taking control of you.