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How to Create a Budget for Your Small Business

Learning to manage a budget for your small business is no easy task. Oftentimes a small business does not receive a fixed income. Instead they must deal with the monthly income fluctuations that are oftentimes seasonal. Most small businesses refer to these income peaks and valleys as “feast or famine.” The unpredictability of income may have you scratching your head and wondering if it is possible to not only create a budget, but stick to a budget if your income is so different from month to month. Many business owners will tell you that not only is it possible, but it is critical to the success of your business to manage and maintain a functioning budget. You will find that the longer you are in business, the easier budgeting may become as you being to anticipate monthly income fluctuations. Below we give you some of our best tips on how to build a successful budget for your small business.

Analyze and Track Your Business Cycle

The key to any successful business is to have a solid plan when business either picks up or slows down. It can take a great deal of discipline to not overspend when an abundance of money is coming through your business door. However, knowing you will need to tighten your belt and save money for a rainy day will help you “weather” the ups and downs of the cash flow cycle many small business owners face each year.

While budgeting your money is a critical part to any business, a surprising number of small businesses don’t realize that they also need to budget their time. In order to maximize cash flow, you will need to be available to work longer hours during your busy season, and reduce business expenses during slow times.

For example, many businesses simply choose to close their business for the couple of months that they know cash flow will slow to a trickle. You may also consider negotiating lower prices with your vendors during your slow season, or managing your inventory efficiently. For example, some suppliers require that you buy a certain amount of inventory from month to month. Knowing your peak cycle and your slow cycle will help to negotiate what you can and can not purchase throughout the year .

Create a plan

Once you have fully analyzed your peak cycles, then you are ready to create a solid plan to get you through each cycle. Strategize and prepare how you will spend money and when you will spend money for maximum profits. Keep in mind that budgets work quite well as long as you stick to them. The most successful way to have a plan that works is to include some flexibility. Make sure your plan is not so rigid that it will fall apart if situations change (and trust us, they do.) Also consider what the cost will be if you have to deviate from the plan and build that into your budget as well.

Establish Goals

Successfully managing a budget means that you have established benchmarks and goals for your budget. It is almost impossible to manage a budget if you don’t know where you are at (benchmarks) or where you are going (goals.) With goals and benchmarks, you will know ahead of time whether you are on track or whether you need to make adjustments.


Many small business owners think that collecting money from their customers is one of the hardest jobs that they do. However, if you set up automated systems your life will be so much easier. We recommend that you consider electronic invoicing through SecureGlobalPay’s payment gateway to invoice customers via e-mail and allows customers to make payments by following an embedded link. Invoices are generated with line by line detailed information and automatically convert to PDF’s that are attached and sent to the customer’s e-mail address.

Some of the features include:

Simple and Intuitive and it only takes minutes to create your first invoice

Helps to streamline the billing process by reducing the time it takes to manage the paperwork and get paid

Real time invoice creation and delivery may help encourage faster payments

Electronic invoicing is secure and there is no need for merchants to store sensitive data eliminating the most rigorous of PCI compliance issues

Maintain complete and secure records with our enhanced reporting system

Ability to accept multiple full or partial payments in different forms

Even though electronic invoicing can save you time and money, we recommend that you still stay on top of your customers. Managing slow paying customers can quickly begin to dominate time needed to be spent on growing customers.

Budget with a Savings Plan

Saving money may seem impossible, but it is critical to have money aside for the unexpected expenses of running a business. It is often recommended that you have a good 3-6 months worth of savings in your bank that you can use to operate your business if needed.

Using the strategies listed above can help save you the time and money needed to help make your business successful!