Janeane's World: Published By James, Davis, and Associates

We train individuals and teams to work with confidence and competence. Call: 484 381 0532. Email: janeanedavis@janeanesworld.com.

Get a Realistic Budget if You Want a Self-Sufficient Business

Happy African American woman sitting on a couch

It is wonderful to have work that allows you to be self-sufficient, part of that is making a realistic budget.

At a minimum, entrepreneurs want their businesses to be self-sufficient. To be self-sufficient, a business must be able to work within a budget set by the entrepreneur. When broken down into its simplest terms, a budget is a summary of estimated expenses and income.  One of the first steps an entrepreneur should take when starting a business or when reviewing business activities should be to create a realistic budget.

When you have an accurate budget, you can make accurate plans to have a self-sufficient business. When creating a budget for your business, be sure to include all sources of income including:

  • Sales
  • Passive income
  • Residual income
It is also important to include all expenses including:
  • Petty cash
  • Annual bonuses for employees
  • Corporate gifts
  • Coffee and snack supplies for the office

Often when preparing a budget, entrepreneurs fill in the major expenses but forget to include small sums that they spend regularly. By failing to include these small sums, over time, the money for these items will be taken out of the business and thus not available for the major items that were included in the budget. As a result, there will be a cash flow shortage. So, when making your budget, be careful to take into account all your income and expense information.

When a business is self-sufficient it can provide for itself without the entrepreneur having to continuously supply cash to the business. A self-sufficient business is a mature business that can cover all its expenses including the salary the entrepreneur chooses to draw from the business.  If you are running a business that is not able to pay its bills without bringing in money from an outside source, your business is not self-sufficient. If you have been running a business for an extended period and the income the business provides does not cover the business’ expenses what you have is a hobby, not a business.

In conclusion, it is wonderful to have work that allows you to be self-sufficient, part of that is making a realistic budget. So, the question for you this wonderful day is have you prepared a realistic budget for your business?

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