Friday, July 03, 2009

The Budget: An Important Part Of Any Firm's Success

When we talk about running a business and the numbers, everyone first thinks about the Big Three (Profit-Loss, Cash Flow and Balance Sheet). Unfortunately, no one talks about the budget.

In talking with business owners throughout the month, I'm shocked at how many owners don't have a budget.

If you don't have a budget, start one today. Break everything down from your "Cost of Goods," "Salaries," "Income," and "Expenses." Then, as the year goes on, re-check your budget. Put percentages next to items each month and make sure the company is staying on target. It's the only way you'll know if (and what) things are going wrong. The sooner you realize these things, the sooner you can take action and correct them.

The budget is really your guide to help you through each month, quarter and year. I know our budget has helped us stay on track, and it has helped us understand all of our numbers better.

Planning for 2010 is just starting. If you don't already have a budget, create one today.
--Ron Ameln, SBM


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