Even if a business is only open for 3 or 4 months out of the year, the business will have income and expenses during that timeframe. A business owner can estimate those numbers (budgeting!) and use those numbers to determine how many jobs need performed (lawns mowed, driveways cleared of snow, etc.) in order to at least break even.
Budgeting is a key part of managing cash flow.
This is an excerpt from a presentation I give to business owners about managing cash flow and working effectively with banks.
Here are 5 mistakes I see businesses make in the budgeting process.
One mistake I see small businesses make with budgeting is: not accounting for the owner’s salary. It seems like an obvious thing to include, but I’ve seen many small businesses forget that the owner will need to take money out from time to time.