“Tips for creating a budget and sticking to it.”
Sixty-one percent of small businesses did not create an official formal budget in 2018, according to new data from Clutch, a B2B research firm in Washington, D.C. When small-businesses owners neglect creating budgets, they risk their businesses’ financial health and shortchange their potential. Clutch surveyed 302 small-business owners and managers to find out why they skipped the budgeting process and to get tips for sticking to a budget.
Small-business owners who forgo creating budgets do so for a variety of reasons, including:
• They think creating one will restrict them from being able to “do their own thing.”
• They think a budget will limit their growth potential by tying them down to a rigid structure.
• They fear that sticking to a budget will be impossible.
The truth is that not creating a budget may create more challenges for a business because budgeting accomplishes several things:
• Budgets help businesses focus. They keep everyone working toward the same goals and help scale the business.
• Budgets help businesses determine what their challenges are and how quickly they need to fix them.
• Budgets provide peace of mind.
• Budgets ease the process of monitoring finances and guide decision-making. For example, if your expenses go up one month, you’ll know why, and you can fix it the next month.
• Budgets provide a measuring stick with which to evaluate your performance against your growth goals.
• Sticking to a budget is doable. Following are some tips for doing so.