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Budgets!
by: Mike Shannon
Budgets! There I've said it. For some the most hated and
feared word in business. But it doesn't have to be that way.
As a matter of fact, a well thought out and constructed budget
can be the small business owners best friend. After all, a
budget is just a laid out plan to produce profits and profits
is what we are all after.
Instead of feeling overwhelmed by looking at a 13 column
budget spreadsheet with rows and rows of expenses, just break
it down into it's simplest terms:
Revenue - Expenses = Profits
Looking at it this way, we see there are only two things
to control, work on or even worry about, revenue and expenses.
The only way to increase profits is to increase revenue or
reduce expenses. Our jobs, as business owners of course, is
to do both thus accelerating our profits. I know this is business
101, the very basics and sounds so simple but you'd be surprised
how many businesses today don't operate on a budget. Please
take the time, or call me for help on this, and write down
a simple budget of all of your revenue streams and every single
expense you have on a monthly basis. If you still don't grasp
the concept then have your accountant or tax preparer show
you how.
Once you have everything written down you use this as a guide
to manage your profits. How can we reduce communications costs
(phone bill)? Is our graphics printer the best we can do or
is it time to get competitive bids (printing expenses)? Can
we refinance a business loan to reduce monthly interest expenses?
Line by line you look at your expenses and see if there is
any thing you can do to reduce them. Don't forget your revenue
streams too. Is there something or some service you sell that
could handle a price increase? Is there a new product or service
you can introduce to bring in more revenue. Focus on growing
revenue and look at each of those expenses line by line and
you may be surprised at how much profit you can squeeze out
of your existing operation.
About The Author
Mike Shannon is the owner of Shamrock Business Coaching,
a professional coaching practice that helps owners of small
and medium sized businesses increase their profits. You can
visit Shamrock Business Coaching on the web at: http://www.shamrockcoaching.com.
MikeShannon@ShamrockCoaching.com
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