A lot of business owners today get bored when it comes to their Business Finances. The fact that you run a business makes it compulsory for you to know some basics about finance. Budgeting is one of them. Budgeting in simple terms means ‘planning in advance how much you plan to spend’. This applies to your business as it has numerous advantages that would help ensure your business is being run accurately. Easy-peasy, right? Your business plan is incomplete without a plan. Below is a list several advantages of having a budget for your business.
- Plan and Goal Setting:
A budget enables you to set your goals and plan for the business. A budget is an essential part of your business plan. Your budget plays a great part in determining what you have set out to achieve in your business.
- Control on Spending:
Keeping a budget sets the whole pace for your business, it serves as a guidance before taking any financial decisions. As expenses come up, the budget would be referred to so you can ensure deviations do not occur and unnecessary financial commitments executed. If contingency expenses (unforeseen) are necessary, provisions can be made for such in the budget.
- Auditing purposes:
A budget will enable you place checks on employees. Overspending and fraud can be checked with a budget as one of the aiding tools. It also helps external and internal auditors in carrying out their assignment to appraise your financial statements.
- Pitching your business to investors:
No investor will be willing to make any commitment to a business owner without any sort of financials. A budget will state how much you need from an investor. Your budget should be highly detailed and should state exactly what you are spending on. A budget is an essential part of your business Financial Model. Venture capitalists, angel investors, and banks need this to make decisions if they would like to help your business.
Don’t just close this page. Let’s keep Nigerians informed. Share this post.
How has Budgeting helped your Business?? Drop a Comment