A few years ago, when I quit my job to freelance full-time, I made the conscious decision that I would bootstrap my business. That meant that I would reinvest some of the money the business was bringing in back into the business itself. I made this decision because I really didn’t want to take on debt or be beholden to anyone who gave me money.
Over the years, this means I’ve had to learn how to create a business budget. I’m going to be honest, in the beginning, I didn’t really think about having a business budget. I knew what I could and could not spend.
However, as my business and brand have expanded, and as I see myself investing more money into things like marketing, and as I have more personal expenses than I used to, it’s important for me to keep a business budget so I can keep an eye on things.
Now, when most people hear “business budget” they are usually at a loss for where to start. I definitely was too. Fortunately, I’ve learned that simple is usually best. In this post, you’re going to learn the things you definitely need in order to create a business budget.
Put a limit on how much you’re willing to spend.
My issue with a business budget in the past was that I really don’t have any qualms about putting money back into my business. Since I see it as an investment, I shell out the money for a good email marketing service or education often times without thinking twice about it.
However, everything has it’s limits. Because I really didn’t care about the spending in my business, I was often times left with not very much to show for my success in my personal finances. It wasn’t until recently when I realized this had to stop.
The easiest way for me to put the reins on my business spending was simply to decide how much I was willing to spend on regular business expenses each month and stick to it. With that, I came up with $2000. Two grand may not seem like a lot of money (and it’s really not as far as business operations go), but I can get a lot taken care of for less than that each month.
Know your priorities.
Another reason why I had a hard time sticking to a business budget in the past was because I didn’t really have any priorities. Like most creative entrepreneurs, I’m never without ideas and there’s a lot I want to accomplish. This led to a lot of wasted time and money as well as incomplete projects.
The only way for me to overcome this was to use the KISS acronym (Keep it simple, Stupid). I had to simplify my business by focusing on one thing at a time. From there, I knew what to invest in and what not to invest in.
Additionally, it helped me prioritize expenses. For example, liability insurance is probably more important than investing in a launch for a digital course that I would be rushing anyway.
By keeping these two things in mind, I’ve been able to create a solid business budget and actually stick to it. Sometimes we have to tighten our belts when it comes to business spending.
