The unpredictable nature of the future makes budgeting a difficult task to start and maintain. When unexpected obstacles turn up and seem to overturn all of your budgeting efforts, it sometimes seems like a lost cause—what’s the point if the predictions and projections are wrong? However, budgeting is the key to running a successful business, big or small. The thing to remember is that it’s not about getting everything exactly right. The world, you, and your business are constantly changing, dynamic by nature, so your budget should be, too.
Why Budget?
Obviously, budgets help you manage your costs. But beyond that, budgets are so important to your business because it allows you to look realistically at your goals and projected profits. Because it gives you a glimpse into the future, a budget also allows you to plan for expected peak periods and slow periods. Finally, a budget helps you better understand what it will cost for you to reach your business and profit goals.
Updating
Every month is a different experience for you, your partners, and your business, so your budget should not just be copied and pasted over. Take another look at your budget every month and use last month’s experience and statistics to evaluate how the budget could be altered to better fit your previous or new business goals? Update your schedules and plans to fit the new projections of peaks and lows, and adjust your spending to stay on track.
Reacting
When something unexpected happens that significantly impacts your budget and business, use your budget to properly react to the situation. Stay future-oriented and calculate what it will take and how long it will take for everything to recover and re-stabilize after this event. In the meanwhile, also adjust your spending and budgeting to suit the changes in revenue that result from this unexpected event.
Spending
One of the best uses for a budget is to keep track of what and how your are spending as a company. By having a record of this and putting it in context with your profit goals, you will be able to look at places you could possible be more efficient with spending and cutting back where possible. This isn’t to say that you have to operate on bare minimums; in any case, you can see where cut back is possible so that you know where to go straight away when the need arises. Also, the purpose of your budget should not be to set strict limits of what money can and cannot be moved where and when. Your budget needs to be flexible so that your business can have room to breathe. Think of it as not a limiting factor but simply a method of guiding you to reaching your business goals.
Keeping up with a budget can feel daunting, stressful, and at times frustrating, especially when you’re just starting out, but over time it gets easier, and eventually, with more experience and more data, it will begin to feel like natural intuition. You’re not always going to be right and you’re not always going to meet your budget, but keep your mind open and let your budget help you not hinder you.
About the Author: Zane Schwarzlose is an SEO at Fahrenheit Marketing LLC, an Austin web design firm. Zane thinks that controlling a PPC budget is one of the harder things about Internet marketing.
Cover photo credit: Terry Johnston
