Small Business Budgeting and Forecasting Tips

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Small Business Budgeting and Forecasting Tips
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• As a small business owner, setting up your budget
  enables you to forecast your overall outgoings
  and profit margins. You should use it to plan
  ahead and judge how your business is going to
  perform. This should be an ongoing process of
  reviewing and updating your budgets, then
  comparing the results with your original forecast
  plan.

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• A well run business should keep on top of its
  budget to try and minimize potential losses. Some
  forecast for a whole year, while some use real
  time data to project results. There is also scope
  for creating mini budgets for different
  departments, within the main budget.

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• Where should you begin when budgeting for your
  small business?
• The simplest solution to forecasting business
  performance is by creating a master budget based
  on your company's performance of late. This
  financial document will give you a snapshot of
  how you think your business will do over the
  coming year. It's also wise to discuss your
  projections with your colleagues or management
  team, and talk about any changes in the
  marketplace that might result in a change either
  in your projection, or between this year and last
  year's performance.

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• Your next step is to create some real time
  projections. Make space in your master budget for
  a section that projects your results using data
  as it occurs. A section compiled using the
  figures from your first three months of sale
  might give a more accurate result than static
  figures.

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• Make a division in the 'total' column of your
  master budget, between the number of months that
  have passed, in order to end up at an average
  monthly income and expenses. Projecting where you
  will end the year, is achieved by multiplying
  those figures by twelve you should end up with a
  projection of where your company would be at the
  end of year, providing the figures remain at that
  level.

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• Projecting your profits more accurately is easier
  if you're aware of your overheads. Knowing how
  much it costs you to produce each unit, make each
  unit and provide an overall service, is equally
  as important as knowing your overheads. Your
  master budget should identify all of your
  overheads, such as wages, rent and utility bills
  which you can calculate to give your company's
  overhead costs dividing this number by the total
  amount of units you produce, will give you your
  overhead costs per unit.

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• Creating a number of different scenarios in which
  your budget shows a lower and higher amount of
  sales will enable you to see where you could make
  adjustments should those projections prove
  accurate.

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• But if you're struggling to make headway when
  budgeting for your small business, why not hire
  an accountant to complete your forecasting for
  you? While budgeting is an important part of your
  routine as a business owner, if it begins to
  encroach on time that could be spent doing
  something more constructive, your business may
  actually suffer as a result of it. This is when
  it would make sound business sense to employ a
  professional.

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• At Heyer Associates, we proactively assist our
  individual and small business clients in meeting
  their goals. Our key area of focus is ensuring
  that our clients remain compliant with federal
  and state tax laws by providing them with high
  quality accounting and tax preparation service in
  Miami. If you are looking for an accountant in
  Miami, Heyer Associates would be a right option.