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Small Business Budgeting Tips - Seattle Biz Coach Terry Corbell
Even though it isn’t considered fun, Seattle Biz Coach Terry Corbell says budgeting is imperative for startups in order to maximize their performance. He quotes an expert who provides important tips in finance.
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,”
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/
His portal, The Biz Coach, provides countless business-coaching strategies: Planning, Operations, Marketing/Sales, Finance, Tech, Public Policy, HR, and Wall Street.
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Seattle Biz Coach Terry Corbell is a business-performance consultant and profit professional. As a columnist, he authors performance-