Starting out with a simple spreadsheet, or pen and paper, can open the doors to understanding how much money you earn and how much money you pay out. It is all about starting to visualize the numbers.<\/p>\n\n\n\n
Bola Sokunbi is the founder of Clever Girl Finance<\/a>, an online platform and community for personal finance and accounting courses. Sokunbi, also an author, posted a video on YouTube especially for business owners, \u201cStarting A Business The Right Way: How to Create A Simple Business Budget<\/a>,\u201d which has garnered thousands of views. <\/p>\n\n\n\n To begin the budget journey, Sokunbi suggests, at the very minimum, writing down every essential cost that is needed to keep your business open, and categorizing what is recurring every month. That way, she says, you know how to see past those numbers. <\/p>\n\n\n\n Clever Girl Finance\u2019s Budget Tips for Shops:<\/strong><\/p>\n\n\n\n Bola Sokunbi. Photo by Caroline Beffa Photography<\/em><\/p>\n\n\n\n If you are opening a new business, startup costs should also be factored in, she says.<\/p>\n\n\n\n \u201cOnce you factor in startup costs, you can determine how long it may take to recoup them by taking the startup costs and dividing them by six months, a year, and say, \u2018Okay, now I know how much extra I need after my essential costs are covered to recoup starting costs,\u2019\u201d says Sokunbi.<\/p>\n\n\n\n Like personal finances, she continues, business finances can have ebbs and flows. Not only should you track those costs that keep your business open, but as time goes on, write down an amount you want to set aside for emergencies, such as economic downturns or slow seasons. <\/p>\n\n\n\n \u201cBuild a line in the budget that has a goal to set aside a fixed amount every month,\u201d says Sokunbi. \u201cHave a business backup. For example, business may be slow and instead of letting parts of your team go, you can continue to pay them. Or maybe you will need to upgrade your equipment. By doing this, this makes you rely less on debt in uncertain times.\u201d<\/p>\n\n\n\n While budgeting with digital tools like QuickBooks and Microsoft Excel sheets is valuable, Sokunbi says your goals as a business owner are just as vital. <\/p>\n\n\n\n \u201cThose programs will tell you how much you made, how much taxes you owe…but they don\u2019t really align with what your goals and objectives are,\u201d she says. <\/p>\n\n\n\n \u201cSay I want to make $500,000 this year, or I want my business to be profitable by June,\u201d she continues. \u201cThat is where budgeting comes in. This is where business owners need to be proactive and not to rely on that software. Those tools can\u2019t read your mind.\u201d<\/p>\n\n\n\n
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\n\n\n\nDefine Business Goals<\/strong><\/h2>\n\n\n\n