Budgeting Made Easy
Your alarm business has just reached a huge milestone: you now have the capital you were seeking. Now is the time to allocate and manage your money in order to meet your business objectives. Buckle down and create your monthly business budget.
Maybe you’re thinking, “I am too busy to sit down and spend hours creating a budget.” If so, that mindset needs to change. Without a budget your alarm business could get hit with unexpected expenses and/or fall victim to economic downturn, both of which could drive you out of business.
Think of your budget as a blueprint for your short and long-term business goals. In its simplest terms, a budget is a description of profits and losses. This blueprint allows you to:
- •Create a growth strategy – hiring new employees, developing a marketing and advertising campaign, upgrading to a larger physical space – and make sure the necessary resources will be available when the time comes.
- •Determine the financial health of your business. You might be seeing profit, but not realize that your expenses outweigh your income.
- •Identify new investment opportunities, such as new products.
- •Measure the progress of your goals and growth strategy.
- •Prevent over-spending. Setting boundaries on expenditures allows you to set goals for what you want to purchase for your business in the future.
- •Secure loans, bring on additional team members, and attract investors.
Creating your budget does not need to be a difficult process. First, take a look at your profits. Income can be predicted by reviewing prior years (and/or months), researching the current market trends, and accounting for all streams of revenue. The same process can be used to predict expenses – both fixed and variable. It is recommended to always be a bit conservative with your profit predictions to build a cushion, and to budget for at least a year out. While a budget does not need to be 100% accurate, it should be as detailed and realistic as possible. Spend time reviewing and possibly revising your budget each month so that you can control your finances and spend accordingly.
Once the budget is created and you can see that your finances are on track, use it! This is a tool to help your alarm business grow. As financial pro Dave Ramsey explains, “A budget is telling your money where to go instead of wondering where it went.”