Are you finding yourself stuck inside with nothing productive to do? Are your floors clean? Bathroom scrubbed? Alcohol sorted volumetrically?
Well, my friend, you’re in luck! I’ve developed a series of mental exercises to help you through these tough times!
And by series I mean two.
Let’s talk about why budgets and cash flow forecasts are crucial to your business and how they can help you!
Now is a great time to do up a budget for your business! (Well, and you personally too, if you don’t already have one). Small Business BC has a great template you can download for free – click here!
A budget is a great tool for your business and will help you make informed business decisions. It allows you to estimate how much your business needs to spend on key components such as operations, payroll, and cost of goods sold each month.
A budget has the advantage of answering the age old question: how much do I need to do in sales each month to not drown in debt?
This can help you to make better informed decisions for your business and will alert you to anything being seriously wrong. For example, if your monthly budget total for expenses is $2,000 and all of a sudden you’ve spent $5,000 in one month, you know this needs to be looked into. Or, if you’re looking to sign a lease on a bigger space, your budget will tell you whether or not you can afford that lease.
Cash Flow Forecast
Now that you’ve done up your budget, it’s not time to rest! No! It’s time to continue with the cerebral gymnastics and complete a cashflow forecast. Good news: Small Business BC has another great template for this – click here. Also comes with a business plan template (also a VERY useful thing to have, and this is an excellent time to create one or tweak an existing one but that’s a whole other blog post on its own).
I love me a good cash flow. My favorite part is doing the different levels of projected sales – conservative vs. optimistic.
A cash flow analysis works hand-in-hand with a budget and together the two reports will do things like help you plan for the future. Say, for example, your business is seasonal, maybe your busy season is the summer but you still have expenses the rest of the year. A budget and cash flow forecast will tell you how much you expect to have in bills each month, and how much you need to do in sales to cover them.
See? Fun, right?
Alright friends, go forth and buildeth thy budgets and cash flows. Unless of course you don’t want to, in which case Rogue Bookkeeping is here to help! Contact us to discuss your situation, what you need help with, and how RBK can help.