Your business budget puts you in control of your business. It helps you avoid overspending and track your financial goals. But with the coronavirus you may have had to throw your business budget out the window to stay on top of things. To help you get your business budget back on track post-coronavirus, you should consider making some modifications.
4 Ways to Adapt Your Business Budget Post-Coronavirus
Businesses across the country halted operations and experienced a decrease in cash flow due to the coronavirus outbreak. As some States lift stay-at-home orders and business operations return to normal, they will need to adapt their budget to take this into account.
We have four tips below to help you get your business budget back on track when things return to the “new normal”.
1. Pay Attention to the New Numbers
Your business would have been impacted by the coronavirus in some shape or form. Maybe you had no choice but to temporarily close your business due to Government regulations. Or, maybe you made the best out of a bad situation and invented creative ways to keep your cash flow coming in.
Whatever the case may be, your business revenue has probably experienced some changes over the past few months. As a result your cash flow may be different than what it was pre-coronavirus, so now is the best time to rework your business budget and do some much-needed planning.
If your business experienced a decrease in revenue over the coronavirus pandemic, you’ll need to account for that in your budget. And to help bounce back from the negative cash flow, you may need to make some sacrifices, such as cutting unnecessary expenses and reducing spending.
You also may need to review your sales to work out what items have reduced in volumes and determine the sales where you have had good margins.
2. Utilise Financial Forecasting
Wouldn’t it be great if we could predict future revenue and resulting profits of our businesses? Sure it would be. But unfortunately, we can’t. What we can do as business owners is forecast our revenue, profits and our cash flow.
If you’ve never heard of financial forecasting before, here’s a brief rundown: Financial forecasting can help you estimate your business’s future financial health by looking at past financial data and reports. Forecasts can help you estimate your business’s income, expenses, and more. Not to mention, they can develop projections or scenarios for profit and loss statements, balance sheets, and cash flow forecast.
Forecasting can get your business back on track financially and assist you with budgeting. And, it can help you with your business planning post coronavirus by preparing you for potential future scenarios.
3. Prioritise Paying Back Debts
If you had to take out some type of loan or borrow money during the crisis from places such as the ATO, creditors or your bank then you’re not alone.
Try to avoid being stuck in debt for many years to come by prioritising paying off your debt as soon as possible. Allow room in your budget for extra loan and debt payments (trust me, you can make room if you need to). Of course, you should still make necessary business expenses as your first priority in your budget. So, don’t push those aside just to pay off your debt sooner.
To help pay your debt off and get your finances back in order, focus on paying off one debt at a time and set an end goal.
4. Look at Your Financial Goals
Like many other businesses, the coronavirus has forced you to rethink your business budget and what financial goals you should be working towards.
It’s a good time to take a look at your current financial goals and ask yourself if they are on track. If you had to make some drastic changes to your budget due to the coronavirus, you may need to adjust your future financial goals to reflect that.
Your budget should reflect your priorities and financial goals. If it doesn’t, you may need to reconsider your goals and dig deep to think about how you can accomplish them after getting through the post coronavirus world.
It’s critical that businesses continuously move in the right direction as the post pandemic world evolves. Businesses that have change ingrained in their culture are likely to do better in uncertain times. A crisis like this brings new opportunities and should be a trigger to explore new directions.
The Government is likely to invest more over the coming years to help mitigate the impact of COVID-19. How they direct this spending, whether it’s aimed at restoring specific sectors in the economy or triggering stimulus in a certain area, it will have an impact on a business’s outlook as well.
We have entered a time where consumer patterns have changed. Fitness solutions for home, home entertainment, people-tracking and data security, new health-care equipment and online education solutions, to name just a few, will be in higher demand. All of these developments create many new opportunities for businesses.
If you need help adapting your business post pandemic contact NCA Books here.