Creating a budget is one feat, sticking to that budget is a whole other feat in itself. When owning a business, spending profusely may seem like the only way to get to your dreams but it’s not. Careful planning and outlining of your business dreams for “smart” spending is the key to great business growth.
In order do achieve that you must to the seemingly impossible task of sticking to your budget.
11 Tips for Sticking to Your Fashion Business Budget
Do not spend more than you make. This is the number one budgeting rule that unfortunately many business people do not follow. Whether you make $50,000 a year or $5 million a year, you cannot spend more than you earn or else you will always be broke and in debt. When looking at your budget, if your bills or spending are more than you are earning, it is imperative that you start cutting costs. Starting with the luxuries.
Be wary of luxuries dressed as necessities. If over-spending is an issue, most likely you are spending too much on things you don’t actually need even though you may feel like you do. Whenever you feel the need to buy something make sure to ask yourself whether you really need is or is it just something you want or would like to have.
Don’t depend on “maybes.” When updating your budget, do not include money that you are not sure you will receive, such as projected sales. It could give you the illusion that you have more money than you actually do and cause over-spending.
Don’t get too comfortable. Constantly evaluate and update your budget. Your business goals will change and so should your budget. Make sure to take time once in a while to see if you could cut costs in your budget or save more money from some of your expenditures. Revamping your budget and spending can help you make financial room for luxuries in the future or business ventures that may come up.
Get Innovative. The best way to not get comfortable with your budget is to see where you can save a buck or two. Don’t go out to lunch every day or don’t take that lavish vacation. Think of different ways to cut costs and maximize profits.
Don’t get excited by a good sales season. There will be times where your business will seem to be growing quickly or you may be selling exceptionally well for a period of time; but you cannot get too excited and start overspending on luxuries. Before you start giving yourself gifts, just make sure you’re staying ahead of your budget.
You don’t have to be hard on yourself. Everyone makes spending mistakes, no matter how much money you have stashed in the bank. Also the spending mistakes you do make are probably common and normal and are the art of the pains of following a budget. But after a couple of months, keeping track of your expenses will become more automatic and natural.
Take out cash. Taking out a set amount of cash for the week helps you track your spending. Set an amount that covers your necessary business expenditures during the week.
Do treat yourself. Yes it is okay to buy something new for you business as long as they are planned for and built into your budget. They are better seen as rewards for successfully following your budget. Rewards evoke happiness and you will choose something more valuable to you. Through these rewards, you will feel less deprived and more proud of following your budget.
Save for rainy days. Saving is just as important as not overspending. Just because you have an excess of money at the end of the month doesn’t mean you need to spend it. Anything can happen and your business needs to have money in reserve.
Don’t get frustrated. You will make mistakes, you may go over your budget, and you may treat yourself to some luxuries. But over time you will get back on track and be able to achieve your fashion business goals.