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Budgeting Tips for Small Businesses

Small business owners know that the difference between a business that flourishes and one that flounders is the business owner’s ability to budget and create a stable financial plan for the company. There are a number of factors that determine which financial decisions are right for your business, including the age of your company, its size and the company’s financial history. With the right guidance, a solid financial foundation is attainable for any custom closet and organizational unit provider within our Organizers Direct family – it’s just a matter of knowing what to do.

Review the risks

Every decision your business makes comes with its own risk. To determine whether or not a decision is in your company’s best interest, think like an investor. High-stakes risks are sometimes okay for businesses that are still young or smaller in size. On the other hand, it would be wise to stick with slightly safer investments as your company grows and more people depend on you for employment. Consider the long and short-term financial risk attached to each decision.

Know Your Credit Score

Many business owners will apply for some type of financing during their careers. To get the right loans with acceptable interest rates it is absolutely critical to maintain a good credit score (750 or higher). We recommend going through one of the following:

  • Experian
  • Dun & Bradstreet
  • Equifax

All three brands provide businesses with credit score information, but keep in mind each company also uses different scales to gauge the exact score. This could lead to each business providing you with a different credit score rating. Experian pulls from demographic and public information like tax records.  Dun & Bradstreet uses your PAYDEX score to assess how your company’s bills were paid over the last year. Equifax, on the other hand, caters to small businesses specifically by pulling information from the Small Business Financial Exchange.

Not applying for a business loan anytime soon? That’s Okay – your credit score still comes into play when negotiating rates with vendors and suppliers. Grooming your credit score could save your business a bundle in the long run!

Overestimate Expenses

We are in the business of creating custom closets and organizational units. Cookie cutter products do not satisfy every family. Each customer will have different preferences. With the cost of materials and labor, it can be hard to predict if your projects will go over budget.

Know Your Sales

Every business has a different sales cycle with its own independent off-season, but this does not mean your slow season is a time to sit around doing nothing. On the contrary, your business should take advantage of any free time during the off-season to plan for your next peak season and amp up marketing efforts. Get to know your clientele! Attend local events, advertise in the local paper… reach out to future customers and become a friendly face in the community. Even the creation of a quarterly business newsletter goes a long way.

Revisit the Budget

Budgets, like your business, change and evolve over time. There will never be one master financial plan to rule them all – budgets and finances are living documents. They need to be revisited and adjusted based on your company’s growth patterns and the latest market trends. Look at previous years to create financial forecasts to predict what each season will look like going forward. Take slow seasons into account and plan some extra cushion for those times.

Financial planning is the most important part of your business’ infrastructure. If done properly, you could stand to benefit through loans and savings in the very near future. Don’t wait another minute to plan for your company’s financial success.

If you have ever dreamed of owning your own custom closet and garage business, or if you already have a business and are looking for a new investment prospect, take the next step toward an exciting opportunity with Organizers Direct. See what else the Organizers Direct Dealer Program can do for you.

 

 

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