Flemming Business Services


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The simple word 'budget' has been known to make many CEOs and Presidents shudder at the very thought of creating one. Producing and using a budget isn't just for large corporations. It is even more important for you. You have less disposable, liquid assets.

Please answer the following questions honestly:

1)	If you purchase $300 in office supplies or inventory today, do you know how it will affect your cash flow next week?
2)	Do you know how much you spend on telephone service and other fixed costs each month?
3)	Do you know how much you need to make each month to cover your expenses?
4)	Do you know what it costs you to provide your services or products to your clients?
5)	If a client came to you and asked if you could handle the project, would you know if you have the cash flow to handle purchasing the materials to complete it on-time?
6)	Do you have any idea much your company will make this year?
7)	Do you know how much your company will owe in taxes this year?
8)	Do you know how much you will owe in taxes this year?

If you answered No to any of these questions, a budget would be beneficial to you and your company. You will be able to plan for taxes and purchases. You will find it easier to put a price on your services and schedule projects. The same goes for inventory. You will know how much you need to mark-up your product to cover expenses, taxes and still have a nice profit.

A budget is a close look at your fixed expenses, variable expenses and anticipated revenue. Whoa! What does that mean? Fixed expenses are things you can't change such as your internet connection, web hosting, rent, telephone and utilities. While the amount may vary slightly from month-to- month the expense is fixed because it reoccurs each month. Variable expenses are items that you anticipate having to purchase such as office supplies, equipment and travel expenses. These are items that are anticipated but vary widely in cost from mont-to-month. Revenue, of course, is your company's income from products and/or services.

Comparing your expenses each month with your anticipated revenue will give you a good idea of how much you will make each month as well as your yearly total. While it is normal to have less revenue than expenses in the first few years of operation, it isn't a good habit to be in. A budget will help you see where you need to trim costs to be profitable.

If you would like additional information about budgets or would like assistance in creating one for your business, please email or call us. We would be delighted to help you.