BUDGET Is Not A Dirty Word

Ever gotten that gut wrenching fear in the pit of your belly when you thought of making a budget? Then chances are you’ve never cracked a dictionary to find out what this word really means, and worked out how you can use that to your company’s financial advantage.

Want some really good News? Running your business on a budget does not entail downgrading the quality of the things you buy or denying your company anything it needs to operate. What it does mean, is that you have to figure out how to make enough money to afford the items your company has to have and to keep your spending within the limits of your income.

The even better news is this! The most valuable asset you have is your staff and yourself, and your income earning potential. If you want a bigger spending budget, then work out a way your staff and you can be more productive to generate more income.

Another definition you need know is this: a BUDGET is the sum total of the money it takes for the company to do business, and to reach its goals.

Let’s look at the first part of the definition; what it takes for you and your company to function. Add up all the money you spent in the past year to see how much money went out the door including what you put on credit cards plus interest. Divide the total by 52 weeks, and multiply it by 1.036. The result is your weekly budget. That is the total of money your business has to bring in just to function plus barely keep up with increases in the cost of doing business. That doesn’t include paying compund interest on credit card debt.

More than likely, you have financial goals you also want the business to reach; That’s the second part of the definition. Attaining those goals must get added to your budget as well.

Here is an example: a company owner wants to purchase new office furniture 6 months from now that costs $2,000. They divide the cost of the furniture by the 26 weeks they have before the target purchase date and learn they have to set aside $76.92 every week to have the cash for the furniture. This gets added to the budget, meaning the additional amount of income they have to put into the bank every week.

Most importantly, if you, the company owner, want to reach the goal of financial independence – not working because you HAVE to, but because you WANT to — then the most important part of the budget needs to be the wealth building cash you stash in an investment plan and never touch.

Work out how much money you would have to have in savings to live without working. Divide that dollar amount by the number of weeks until the time you would like to be financially independent. Work out how to make that much more money each week, and you are truly on the right budget track to achieving financial independence.

How badly do you want to be a millionaire in 20 years? Work out a way to grow the business’s income enough to stash away $961.54 a week in savings for the next 1,040 weeks and you will be a millionaire! The additional interest growth on top of that will be a a nice add on perk that more than keeps up with the rise in the cost of living every year.

Today, with computers in every organization proper budgeting is accomplished much more efficiently than ever before by using Money Management Software, such as shown in this on-line video.. This software can work as a companion to your accounting software for very efficient use with minimum manual effort.

Sandra Simmons, President of Money Management Solutions has years of experience helping business owners and private individuals manage their income to achieve financial independence. To learn more, watch the FREE 5-minute demo video on her website www.MoneyMgmtSolutions.com

- Sandra Simmons

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