Habits of highly successful SMEs: Business boosting budgets

A strong budget structure is the first step to getting business finances in order and will enable your best shot at making a healthy profit.

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Budgeting and sticking to it

Getting your finances in order involves making sure your business has two budgets: an operating budget and a cash flow budget.

Operating budget

Your operating budget should be a prediction of all expected revenues and expenses over a one-year period.

It needs to project your gross and net sales along with net profits and losses.

Expenses are likely to include one-off expenditures such as equipment purchases and ongoing expenses such as rent and wages.

An operating budget allows you to try out different assumptions in advance for variables like pricing and staffing levels so you can take your best shot at making a healthy profit …

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