Whether in personal or business finance, when most people hear “budget” they cringe, shy away, and literally want to go hide under the covers. It is the ultimate red-headed step-child of four-letter-words. I’m always curious about clients’ reaction to a cash management budget discussion, and I have found that answers about why it makes them cringe all come down to a similar bottom line: it is uncomfortable and restrictive – until someone makes it make sense.
The budget, as a method of cash management, has gotten a bad rap over the last few decades – specifically since the uptick of easy, revolving credit that has become universally available to the average individual. If you think back, I’d bet most of you can remember the way your parents or grandparents thought about money – make a budget and live within your means. They had learned from their parents that credit will end up sitting on you like a ton of bricks unless it is managed every bit as stringently as the concept of budgeting itself. Our more recent generations have moved away from that financial strategy through the ease of credit’s “buying power” and its ability to let us have more now instead of having to wait and save.
This is certainly not a moratorium on credit. It can be a valuable and essential financial tool when used appropriately and absolutely has its place in any financial plan. What the above example is intended to point out is that if you really learn how a budget can set you free, it can become your friend instead of the enemy you love to hate. Business owners in Seattle who come to our team at Honest Buck Accounting may walk in the door hating the budget word, but our approach to profit coaching when it comes to managing business expenses will have them loving their budget in short order. Our team’s profit coaching methods for bookkeeping in Seattle focus on the Profit First concept that teaches you to pay yourself first and budget for operating expenses second. This method ensures you have an increasing profit margin that grows while you don’t overspend on business expenses you might not really need. You end up with a more stable and long-term profitable business model that is truly sustainable.
You might wonder why a budget for your business is so important, especially if you have been getting along without one so far. The answer really comes down to knowing where you’ve been so you know where you can go. Understanding where all your hard-earned dollars are spent and learning how to assign all of those dollars where they are really needed helps you plan – for tax time, for possible expansion and growth and for those inevitable downturns we experience in the economy. With this understanding and revenue allocation comes incredible peace of mind. How much you need to spend versus how much is actually available for those necessary business expenses becomes less of a worry. You can respond to changes with more flexibility because you know you have profit savings backing you up.
Getting a new business up and running smoothly and efficiently or rehabilitating a business that is in need of a little help is something that our team of professionals at Honest Buck Accounting excels at on a daily basis. Our goal is to help you put the right tools and methodologies to work that will place success within reach. With a full suite of accounting services such as tax consultation, tax preparation, and bookkeeping in Seattle, we are available to assist you in making your business a sky’s-the-limit venture for now and into the future. Add in PROFIT COACHING and you can be unstoppable. “Budget” doesn’t have to be a four-letter word – let it feel the six-letter love – we can show you how. Visit HonestBuck.com to learn more.