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Blog: The Organized Entrepreneur
 Your Budget - The Ultimate Organizing Tool
The holidays are in full swing. Most of the world is focused on wrapping presents, singing carols and picking out the perfect dress for each party. While all the fun is going on around us, small business owners are wrapping up loose ends for the year and setting strategic goals for 2008. A common goal for business owners is to get more organized with their paperwork and the overall operation of their company next year.
A budget is one of the most effective organizing tools an entrepreneur can possess. It is a critical part of the business plan that maps out the future of your business. Creating a budget and routinely comparing it to actual results will help you to structure and evaluate how you spend both your money and your time.
This is "Budget Week" at realign. I wanted to share with you the simple process we used and hopefully it will inspire you to start the New Year with a solid financial plan for your business.
Income Budget:
The initial budget was created using a spreadsheet so that I could use formulas, make changes and review a variety of scenarios in the least time possible. The first task was projecting income. For my business, this is a simple task. We only have two distinct revenue streams – organizing income and commission income.
Simple formulas led me to the appropriate number for each item.
Organizing Income = Average hourly rate x Estimated billable hours per month
The formula was changed in the second half of the year based on an anticipated increase in fees and the planned hiring of new Assistant Organizers.
Commission Income = Flat rate throughout the year based on prior year experience.
Expense Budget:
To create the expense budget, I printed out the actual monthly expenses for 2007 and went through each line item.
To give you an idea of the process, here are a few of the line items and how I arrived at our budget number.
Advertising expense – Last year, realign had significant advertising expense. We completely rewrote the marketing portion of the business plan during 2007 and there are no advertising expenditures planned for 2008.
Dues and Subscriptions – I looked at each professional organization of which I am a member and plugged my renewal fees into the correct month. Also, I planned for a convenient time to join two other organizations when funds should be available.
Legal and Professional – A review of our contracts and other legal documents is planned for the month of January. I contact our attorney and requested an estimate of the hours that will be billed for this project and the rate.
Office Supplies – This line item is based on prior year actual expense. I did, however, increase last year's total by a small percentage to reflect the supply needs of new staff members.
Once I was comfortable that the budget was reasonable and correct on the spreadsheet, we loaded it into our accounting software and we're ready to tackle our goals for the New Year.
realign wishes you a Merry Christmas and an Organized New Year!
posted on: 12/1/2007 8:30:00 AM by Shana Prichard
category: Business
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The Organized Entrepreneur
by Shana Prichard
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About Shana:
Shana M. Prichard, MBA owns realign, llc, a professional organizing firm. realign, llc provides small business organizing services including filing system design/implementation, desk and time management and QuickBooks set up and training. realign, llc also provides home-office organizing services to individuals.
Shana's Website:
www.RealignOrganizing.com
What I'm Reading . . .
- "Raising Financially Fit Kids", Joline Godfrey
Common sense ideas and insight into raising kids who are wll-prepared to manage their own finances as young adults.
- "The Success Principles: How To Get From Where You Are to Where You Want To Be" by Jack Canfield
This book really got me excited about pursuing my goals and growing my business. There is a heavier emphasis on materialism than what I am comfortable with, but overall this is an inspiring book.
- "The Organized Executive", by Stephanie Winston
- "No B.S. Time Management for Enterpreneurs" by Dan Kennedy
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