Budgeting: The devil’s in the detail!

Do you ever wonder where your money actually goes? Most of us have a pretty good handle on our big, fixed, expenses; most of us know approximately our mortgage repayments, utilities and council tax. But it’s the little expenses that can soon add up and leave us scratching our heads. When it comes to budgeting, the devil truly is in the detail!

Introducing or improving a way of budgeting your money can make all the difference and by keeping on top of your finances you can save more, spend less, and build up a financial safety net for any unexpected expenses. But, good money management isn’t just important for your finances, money worries can cause you stress, anxiety and countless sleepless nights!

The good news is that there are plenty of free online budget planners and mobile apps available that make the task so much easier. The Money Advice Service, for example, offers a number of different tools to help with this.

Whichever method you use, make sure you are honest and thorough. Be sure to include money coming in, including your salary or wage, benefits and tax credits. But, more importantly, be sure to include all money out. It’s easy for the little things to slip your mind when budgeting, but they can grow to become a significant part of your monthly expenditure. One takeaway coffee on the way to work each day can cost you an extra $50 a month! Add in the daily lunch time meal deal and you’re spending another $70.

So, make sure you catch your day-to-day expenditure accurately, food, clothing, entertainment, etc. Bank statements might help you be more accurate with this, especially if you pay for most things on your card.
Getting expenditure down on paper, on your computer or on a budgeting app, can help you rationalize those impulse spending habits more objectively and allow you to re-allocate your money to things that are most important to you.

When it comes to credit repayments, prioritization can also save you some cash. If you have multiple debts (particularly on credit cards) then these may take up a large chunk of your monthly income. But if you prioritise paying off the card or loan that charges the highest amount of interest, you’ll avoid building up interest - and more debt.

If you’ve found yourself being bombarded with multiple debts, a practical option could be debt consolidation. Basically, instead of trying to manage several payments from different places, you can take out one loan which could pay off all your debts at once, leaving you with one single payment per month. Instead of all those payments flying out, it’s just one regular payment, simple to manage and control. Further still, that one payment can be tailored to what you can comfortably afford. Depending on your circumstances, you may even find you are paying less interest per month. Plus it’s always good to feel in control and know you can manage your monthly budget comfortably.

If you need a period of penny pinching to get your finances back under control, when it comes to making cut backs and saving yourself some money, even small changes can make all the difference. Things like turning the heating down a little and switching electrical appliances off after you’ve used them helps save plenty of pounds that’ll soon add up at the end of the month. And don’t forget, with the bigger things like gas and electricity, it often doesn’t pay to be loyal to one supplier. Energy providers typically reserve their best deals for new customers, so shop around to find a cheaper deal elsewhere. You can use comparison sites like MoneySuperMarket and uSwitch to quickly and easily see the cheapest offers on the market - and if you find a better deal, switch!
When it comes to budgeting, the detail really matters. A thorough and accurate budget can take a little while but it can really pay off! If you take the time and do a proper job, you may surprise yourself on the savings you make as a result. Lots of little changes can make a big difference to your finances!

A business plan is one of those tools that may seem tedious to create but will be essential to your company’s long-term success. As business owners, we often assume we that we know where our company is going, that the unexpected will never happen, that the company will grow as its expected to. Your business plan is the first step to ensuring that these expectations come to pass.

What is a business plan?

A business plan is guidelines for a how your business will be run. The easiest way to think of it is like a blueprint of a house or the game plan of a football team. The important aspects of the business, from financial matters to employee expectations, are laid out in a business plan. This allows for proper management of a company and ensures that the future, and any possible complications, are planned for.

A proper business plan should cover every detail of your business. Financial expectations, management structure, and sales plans are only a selection of the items that can be incorporated into a proper plan. This helps you to assess the viability of the business, what it sells, and whether the owner should look at changing how goals are accomplished. Essentially, it helps determine, and ensure, the viability of your business.

Setting up a business plan

Inside the plan should be the answers to any question a new employee, investor, or lender might ask and that business must be ready to answer. Will they be owning their physical location or renting? What will the monthly expenses be? How many employees are they looking to hire? What is their sales and distribution method? All of these questions and many others will need to be answered.

Before making any major moves the business owner should sit down with a financial advisor, a lawyer, and an expert in business planning. These people will help the owner by providing insight and knowledge that the owner may not have on their own. A financial advisor will help to create realistic goals for the firm while analyzing its cash flow and reserves projections to ensure unforeseen obstacles can be overcome. Legal specialists will help to create a corporate structure that minimizes both legal liability and taxes. In the end, the owner can expect to have a clear outline of their goals and the paths they will take in achieving them.

The most important thing to remember is that a business plan is not a static document. Plans should expect to change as a company grows or new obstacles arise. Having an initial plan helps to prepare for dramatic shifts, such as financial issues, loans, or if the owner decides to shut down or sell the business. Continually updating this plan ensures that it will always be able to provide relevant guidance in the moment.

Planning for your financial needs

Banks feel more comfortable loaning money to a company that has a well thought out business plan already in place, as it puts less of a risk of providing a loan. By presenting a completed plan the bank is made aware that the borrower is prepared to take responsibility, and will ensure on-time payments, with less risk of defaulting. A detailed plan also helps a bank’s analysts to understand cash flow, past financial decisions, and to see that your company is being well managed.

A business plan can also assist in attracting new investors when a business is ready to grow. Angel investors and venture capitalist may be intrigued with a pretty presentation, but they will be much more inclined to invest in a company that has a set plan laid out. In either scenario banks and investors will go over company details with a fine-toothed comb, so a well thought out and directed business plan will make the process easier.

If you don’t have a business plan in place already, you may still be able to obtain financing. In cases like this our team works closely with clients to quickly create a plan, complete with a full analysis of your finances. We tie this into a larger lending file that we then use to pitch and secure lenders at low rates. If you’d like more information on setting up a business plan, or how to best position your company for funding, our team is always here for you.