Small Business Budgeting Tips - Seattle Biz Coach Terry Corbell

Sept. 18, 2011 - PRLog -- For entrepreneurs, often the most difficult part of launching a business is preparing financial projections. It may not be the most enjoyable task, but budgeting is imperative for maximizing performance, according to Seattle Biz Coach Terry Corbell.

In his column, “Budgeting Basics for a Micro Business,” he quotes esteemed financial consultant Roni Fischer.

“Eight out of 10 companies fail in the first two years due to insufficient cash,” warns Ms. Fischer, who is based in Los Angeles.

Mr. Corbell believes it’s important to be on top of your financials in order to grow – whether you hope to obtain a bank loan, attract investors, invest in equipment, or hire employees.

“Companies need to develop both an annual operating budget and a cash plan,” says Ms. Fischer.

“The annual operating budget provides a roadmap for your operations for the next 12 months – including your projected sales to customers, your associated costs to produce these items, your marketing and customer services costs, as well as your overhead expenses,” she explains.  

“The difference between the revenue (sales to customers) and the costs is your projected income (or loss) for the year,” adds Ms. Fischer.

She provides more details on why proper accounting of your cash plays an important management role.

“Along with the annual operating budget, you’ll want to project your cash flow,” explains Ms. Fischer.

“For early stage and emerging companies, cash flow is difficult to sustain as growth always requires cash,” she asserts.

“Therefore, it is imperative to know when you will be collecting receipts from your customers and when your bills need to be paid to ensure you have adequate cash to honor your payroll and vendor payment commitments,” she adds.

Ms. Fischer is president of RLF Associates, Inc. (http://www.rlfassociates.com). As a leading consultant for over 25 years, she provides expert financial and management solutions for firms ranging from start-up companies to multi-hundred million dollar corporations.

In Mr. Corbell’s column, http://www.bizcoachinfo.com/archives/8128, Ms. Fischer offers the guidance for preparing your monthly projections. She specifically explains the key elements for an annual operating budget, and what you need to know for a cash plan.

His portal, The Biz Coach, provides countless business-coaching strategies: Planning, Operations, Marketing/Sales, Finance, Tech, Public Policy, HR, and Wall Street.

Plus, it has informative news videos: World, U.S. Business, Economy, Markets, Health and Sports.

All columns and videos are free.

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Seattle Biz Coach Terry Corbell is a business-performance consultant and profit professional. As a columnist, he authors performance-enhancing strategies at The Biz Coach: http://www.bizcoachinfo.com -- Proven Solutions for Maximum Profits.