SMEs Need Business Budget to Succeed

As a business start up and small business consultant, I have noticed a great deal that one of the major reasons 80% of starts ups don't last the first two years is due to lack of proper business budget.

A budget is simply "an estimate of income and expenditure for a set period of time"

Who needs a budget? Every businesses need a budget annually.

The same way large corporations spend a lot to put their company budget together as to provide guidance, strategy and direction for the company, so also micro, small and medium scale businesses must also have business to run with.

Having a profit and loss account is not enough, that is an aftermath. 

The budget provides direction, focus, discipline, accountability, prudence and even propels the business for hard work.
With the budget, you already have tried to map out all that you would be venturing into and exactly what you want to achieve with a period, so you are not dissuaded by whatever wind that comes around.

With the budget, you are focused and you get to align your company with what is good, right and necessary for your small business at the stage it is. You would not venture to acquire what you think you need when you are really not ready for it, or can not afford it yet.

With the budget, if you have budgeted #20,000 as transport for a month, you would put yourself in check not to exceed that budget and if your monthly income targeted was #500,000, you would put all your brain, energy and resources in the direction to achieve your goal, but without a budget, anything that comes and goes are fine.

You can hardly be accountable when you have no budget. A budget is what challenges and scores you. You get praised or scolded by your result (goals achieved) in tandem with your goals preset.

With this, you need no one to hype you or you thinking that your efforts are not being appreciated, as the scorecard would show the difference and input you have added to the business.

In your budget, your salaries and renumeration are stated and every little things including cost of tissue papers, staple pin, tax, levies and bank charges.

Prudence is king. You can never be over prudent with a budget. This does not mean that you settle for less, this only shows that you go for the best with the available resources. You don't fall for all that flashes before your face. You put your money where it would yield desired result that would aid the bottom line.

With our budget in my office, I know I have no resting time until I do all I can and have to do to achieve the set goals. We have weekly targets and monthly which we look at daily and constantly strategizing to achieve them and even surpass these goals.

We have changed some policies and provided some things and have outlined certain things that are important so to achieve the desired goals as an organization.

No doubt, as an MSME, budget and budgeting is not just a business term or a thing for the big companies for a must for all businesses.

I am, 

Sunday Obanubi
Your #BusinessDoctor

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