How to Put Together a Smart Budget for Your Small Business

Managing small business finances is a challenge in a time of crisis, but it's definitely not impossible.

Thrive Global invites voices from many spheres to share their perspectives on our Community platform. Community stories are not commissioned by our editorial team, and opinions expressed by Community contributors do not reflect the opinions of Thrive Global or its employees. More information on our Community guidelines is available here.
small business budget
Photo by Kelly Sikkema on Unsplash

Launching your own business is one of those grand steps in life that could set you on the path of financial independence, long-term success, and perhaps even affluence. That said, it’s also one of the most daunting challenges as well, as the problem of cash flow and financial stability is something you will battle constantly as a small business owner. When you’re just starting out, you can find the best startup funding options easily enough, but you also need to budget for the long term.

Right now, whether you are just starting out or if you’ve been in the market for some time, your priority should be to create a budget for your business and a sustainable cash flow. You can do this by cutting extraneous costs, optimizing your sales budget, minimizing marketing expenses, along with other key practices that will help your company thrive in the new normal.

Here’s what you can do to put together a smart budget for your smart business that will lead to financial freedom and continuous growth.

Work closely with your employees

Many small business owners make the mistake of regarding financial management as a one-person job. Sure, you want to be in control and direct the flow of financial assets through your company, but in doing that, you’re limiting your ability to create a budget that works for everyone. In a practical sense, this means that if you don’t bring your department heads in on the process, you will end up misallocating resources for different projects and campaigns.

This is why it’s so important to work closely with your employees when allocating your financial resources. If everyone’s working remotely, then you can use one of the handy online collaboration tools to discuss projects and their financial requirements, quarterly projections, financial capabilities and more. What you will quickly discover is that your employees are an invaluable part of this process, because they will give you some much-needed insight into how you can best allocate your resources.

Stop wasting money on the wrong social media tactics

Social media marketing is an essential part of every winning marketing campaign, or at least it should be. As a small business owner, one of the best ways to keep your dream alive during the pandemic is to invest in the right social channels that will bring you brand awareness, followers, and qualified leads. That said, if you invest in the wrong channels or tactics, you could easily start losing money.

First up, make sure you’re building a consistent brand presence only on the channels that are relevant to your company, audience, and industry. Next, forget about paying for sponsored ads for the time being, and focus on scheduling social media posts to build your following organically and without wasting money.

Don’t copy and paste your posts from platform to platform, instead, build a backlog of posts for each social network, and schedule their release to train your audience to expect your posts at certain times. In the long run, this will save you time and money.

Get serious about your sales budget

Sales is a science and an art form, but when it comes to creating a budget for your small business, the problem is simple – maximize sales revenue while minimizing sales expenses. Well, the problem might not be as simple as we’d like it to be, but at least it has two clear objectives that you can work with. Your goal should be to build an effective sales budget that will set reasonable expectations for a specific sales period, using available company resources.

To do this, you have to work closely with your sales managers and analysts. Firstly, compile the essential, period-specific reports such as your income statement, balance sheet, and cash flow statement. Next, take a look at market research and consumer demand, along with the current industry and market trends. Compare all of this to your previous quarterly and yearly statements.

Build a budget using this data and industry benchmarks, working with your sales leaders to adjust price points, talk strategy and sales tactics, prepping for peak months, and more.

Monetize your website further with memberships

To have a stellar online presence, you need a performance-driven website that not only loads quickly, but also looks the part. Bringing form and function together when you’re building a site is costly enough, but many small business owners are more fearful of the costs associated with website upkeep and management. You can mitigate these risks by using an intuitive website-building platform, but also by monetizing your site further through membership programs.

For example, some of the best membership site services and businesses out there focus on building clear, responsive designs with a distinct emphasis on exclusive, members-only content. You can do the same by offering memberships to loyal customers. This will help improve your cash flow on a continuous basis, and the easy-to-use platforms will allow you to manage your website without breaking the bank. All of this ultimately makes budgeting much easier.

Budget for effective content marketing

Content marketing is one of the key driving forces for small businesses in the competitive online world. But creating content doesn’t just mean updating your blog page every once in a while, or posting on social media – it’s all of that and much more.

For one, you should keep in mind that content creation can cost you a lot of money if you invest in the wrong content types. You should prioritize your content needs and explore various formats that can bring you success online without wasting money.

A good example would be creating and naming a podcast that you can run regularly to engage your audiences across the digital space. You can set up a podcast with little to no money, and if you do it right, you can expect it to deliver qualified leads, boost brand awareness, and facilitate growth.

Choose these types of content, but also include article writing, creating infographics, posting on social media, and more, to grow your digital presence seamlessly and without breaking the bank. You should have no problem budgeting for content marketing if you choose the most cost-effective types of content.

Elevate security and minimize IT expenses with cloud computing

The COVID-19 pandemic has forced many small businesses to embrace the remote work model or risk closing their doors for good. In the new normal, remote work is going to remain a viable business model for many leaders, but to make it sustainable financially, you need to leverage cloud computing.

A great way to make budgeting easier is to cut your IT expenses by providing a cloud desktop solution to your employees that focuses on security, reliability, and seamless remote work. Cloud solutions are great for small businesses that can’t invest in scaling their own IT infrastructure, and they allow every remote team member to work from home safely.

Your employees can access and store their work on their personal computers, with all the sensitive data being stored in secure data centers. The inherent security against ransomware attacks coupled with reduced IT expenses is perfect for budgeting for other projects and initiatives in your company.

Takeaway

Budgeting for small business expenses is all about minimizing financial waste while maximizing cash flow through sound investments. Make sure to combine all of these tactics into a long-term approach, and you should have no problem building the kind of financial stability that will take your small business forward.

    Share your comments below. Please read our commenting guidelines before posting. If you have a concern about a comment, report it here.

    You might also like...

    Community//

    3 Financial Mistakes to Avoid and How to Address Them

    by Susie Carder
    Photo by Startup Stock Photos
    Community//

    Personal Finance Money Management Tips for a First-Time Entrepreneur

    by Sherry Hao
    Community//

    5 Financial Considerations to Make When Starting a Business

    by Larry Alton
    We use cookies on our site to give you the best experience possible. By continuing to browse the site, you agree to this use. For more information on how we use cookies, see our Privacy Policy.