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7 Budgeting Basics for Small Business Owners
by Courtney Nagle
April 30, 2023
Woman working on business finances at desk

So, you’ve taken the plunge and started your small business, now what? It’s important to make sure you set yourself up for success. One of the ways to do that is to make sure you have a budget that will keep your finances in order.

Check out these seven budgeting basics for small business owners.

1. Keep Your Small Business Finances Out of Your Personal Finances

This one is huge! Co-mingling business and personal money may seem easier, but it can lead to complications down the road. Keep a record of your business expenses to take advantage of available tax benefits. It also can be risky to use personal money to fund your business as it increases your personal liability. Personal and business finances are equally important for success, and keeping them separate will help.

2. List Your Expenses

Next, you’ll need to know exactly how much your business is going to cost to run daily and monthly. List out all your expenses, rent, employees, supplies, services, etc. Make short-term and long-term projections with your income.

3. Budget for Your Wants

If you’re planning ways to improve your business, be sure to budget for them, and save until you can afford them. If they are not necessary for your business to run well, there’s no need for you to go into debt.

4. Know What to Expect from Your Business Income

Relying on your business to provide for your family takes some planning and knowing exactly how much money to expect each month. If you have no idea how much money will come in, then there’s no way to budget and allocate your money to certain things.

5. Set a Savings Goal for Expansion or Security

Start a savings plan for your business. In order to expand, hire more people, and provide security for your family, it’s important for small business owners to set aside small amounts of money to have long-term financial health. Small business owners often face difficulty saving money, since many have very tight budgets when they start. Saving from the beginning will help ensure you have some cushion in tough months.

6. Look for Areas Where You Can Cut Costs

Efficiency and frugality will help your small business succeed. I recommend taking inventory of your expenses every month and considering areas where you can cut costs, not by cutting quality. I’m not advising cutting corners, but there are ways to save money and run your business efficiently without affecting the quality of your product or service.

7. Be Realistic.

Make sure you have realistic expectations for your income and your expenses. Do your research, and don’t expand too quickly.

Budgeting is essential for your small business's success. It’s important to keep your personal finances separate from your business finances so that you know exactly where your money is going and are able to easily provide documentation for your business taxes.

If you are struggling to make ends meet and would like help creating a budget, look for a nonprofit small business coach, reach out to a SCORE Mentor, or check out these budgeting tools. Creating a plan and a workable budget will get you on the right track financially.

About the author
Courtney Nagle
Courtney Nagle is the Digital and Social Media Specialist for the National Foundation for Credit Counseling (NFCC), where she oversees content creation for the NFCC blogs, manages the organization’s social media channels, and engages with consumers in hopes of increasing financial literacy and raising awareness of the resources NFCC member agencies offer consumers looking for debt relief.
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