Article Directory

Ever gotten that feeling of anger and despair when you thought of working out a budget? Then the odds are good you've never looked up the word in a good dictionary and learned all about the correct definition, and figured out how you can use that to your company's financial advantage.

Want some really good News? Running your business on a budget does not entail downgrading the quality of the things you buy or not purchasing something your business needs to operate. What it does mean, is that you have to work out how to make enough income to be able to afford the things your business has to have and to keep your expenditures within the limits of your income.

There's more good news! The most valuable asset you have is you and your staff, and your income producing potential. If you want a bigger spending budget, then work out how you and your employees can be more productive to bring in more income.

A second definition you need know is this: a BUDGET is the sum total of the income it takes for the organization to function, and to attain its goals.

Let's consider the first part of the definition; what it takes for you and your business to run. Look at your Profit & Loss Statement to find out how much you spent and add the amount you are carrying on credit cards plus interest. Divide the total by 52 weeks, and multiply it by 1.036. The result is your weekly budget. That is the amount of income your business has to bring in just to operate plus barely keep up with rising prices. That doesn't include paying compund interest on revolving credit debt.

More than likely, you have financial goals you also want your company to attain; That's the second part of the definition. Reaching those goals must get added to your budget as well.

For example: a business owner wants to buy a new piece of equipment 6 months from now that costs $4,000. They divide the cost of the equipment by the 26 weeks they have before the target purchase date and learn they have to set aside $153.85 every week to have the cash for the equipment. This gets added to the budget, meaning the additional amount of income they have to put into the bank every week.

Most importantly, if you, the business owner, want to attain the goal of financial independence - not working because you HAVE to, but because you WANT to -- then the most important part of the budget needs to be the wealth building cash you set aside in an investment plan and never spend.

Work out the amount of cash you would need to have in savings to live without working. Divide that dollar amount by the number of weeks until the time you would like to be financially free. Work out how to make that much more income each week, and your budget is on the correct path to gaining financial independence.

How badly do you want to be a millionaire in 20 years? Work out a way to grow the business's income enough to set aside $961.54 a week in savings for the next 1,040 weeks and you will be a millionaire! The additional interest earnings on top of that will be a a nice add on perk that more than keeps up with the rise in the cost of living every year.

Today, with computers in every organization this task of budgeting is made so much easier by streamlined and automated Money Management Software, such as shown in this video.. This software can work as a companion to your accounting software for very efficient use with minimum manual effort.

Sandra Simmons, President of Money Management Solutions has years of experience helping business owners and individuals manage their money to achieve financial freedom. To find out about the Money Management Software described in this article, watch the FREE 5-minute demo video on her website www.MoneyMgmtSolutions.com