Small Business Guide for Smart Mid-Year Budgeting
June 14, 2016
Nothing quite says ‘summer’ like long, lazy days, warm nights, Vacations at the beach, and… mid-year budgeting, right? Budgeting may not be the first thing you think of when summer approaches, but the season is a natural midpoint in the year to stop and take a look at your business to see if you are on track to meet your annual goals. If you need to make a correction, it will be easier to do it at mid-year than at the end of the year. So, before you leave for that beach vacation here are some things to consider as you approach the half-way point of the year. Are you spending on things that actually matter? Look at your expenses now instead of scrambling at the end of the year or at tax time. Planning ahead can save you money on taxes. Are there things you are paying for that you don’t use? Automating your payments is a good thing, but you can sometimes forget you’re paying for things that you no longer use. As you review your expenses, consider whether you spending on things that actually matter. Each year, review each expense item to see if you still need it, and if you are getting the best price. For example, compare the cost of things like your telephone, your internet service, and your business insurance. Make sure you have the features and options you need, and that you aren’t paying for things you don’t need. Apps that Can Help You Track Expenses If you’re too busy to sit down and take a hard look at your expenses, consider using one of the many available business apps to track your expenses on the fly.
- BizXpense Tracker is ideal for consultants, as it tracks expenses, mileage and time worked. It lets you customize your expense categories and has robust reporting capabilities.
- InDinero tracks expenses, and also manages cash flow, reconciles accounts and handles year-end tax reporting. The app lets you track your expenses and cash flow anywhere.
Set Smart Small Business Budgeting Goals Compare your annual sales and profitability goals with your actual performance so far. (Remember being goal oriented is one of the characteristics of successful entrepreneurs. Consider whether you are on track to meet your goals if everything stays the same. Then look at what will happen if it doesn’t. If you’re on target to meet your sales goals, identify what you have to do to stay on course. If your business is seasonal, factor in that seasonality. Evaluate the business you have in the pipeline to see if it is likely to generate the revenue you need to reach your goals. Plan now for third and fourth quarters. Year-end planning is great but mid-year planning can help keep you on track all year round. Look at last year’s revenue and profit figures. If there were any year-end surprises, assess whether those are likely to occur again and, if so, what you can do to account for them. Get Some Low Cost Help – A Summer Intern If you’ve been toying around with the idea of bringing on an employee, or your business is seasonal and you need extra help in the summer, consider bringing on an intern. Interns are typically (but not necessarily) college students who will work during the summer for a low wage in exchange for resume experience and a solid recommendation. It’s a mutually beneficial relationship—you get inexpensive help and they get a ‘real job’ to put on their resume. Here are some things to keep in mind when hiring an intern.
- Set and communicate your expectations. Set a start and end date for your intern’s employment. When you assign projects, remember that they need to be completed by the time your intern is ready to return to school in the fall. Make a list of the tasks you want your intern to do, review it on the first day, and revisit it weekly.
- Factor in training time. An intern may not have any professional work experience when they come to you. This, combined with the fact that you only have them for a few months, means that you will likely be supervising them closely and correcting them frequently. Talk about this when you interview prospective candidates, and again when your chosen candidate starts. Explain that you’re not picking on them or nagging them, you’re just taking this opportunity to provide them with the best possible experience.
- The devil is the details. You’ll need to explain in detail everything you want your intern to do, and, most importantly, make sure they understand why you’re doing it. Help them to see the big picture. If things are not being done the way you want, proactively address the problem. With an intern, you are a teacher as well as a manager, so don’t let bad habits develop.
- Provide a meaningful experience. Interns aren’t free, but you can usually get one for minimum wage. In exchange for cheap labor, you need to train and mentor. Make sure you give your intern something meaningful to do – not just make the coffee.
- Protect your business. Remember that an intern may be more likely to make a mistake than an experienced employee would. Your professional liability insurance protects you against claims and lawsuits that may result from something your intern did or didn’t do.
Take some time to recharge Plan for some vacation time for you. You know what they say about all work and now play, so factor in a few days off to recharge. If you can’t take a week or even several days in a row, plan three or four long weekends in a row. If summer is your busiest season, plan now to take some time off in October or November. Do you take a mid-year look at your performance? Tell us how in the comments below.