A Home Business Franchise Essential--Making A Budget
A Home Business Franchise Essential--Making A Budget
1. Gather Some Information
Whether you’re just starting a franchise business or have been in operation for awhile, scraping by without a budget, here’s where to begin. Obviously you want to know something about your own business, so go back through whatever records you may currently have and look initially at two things: cash inflow and expenses. But don’t stop there. Continue digging for information by looking at market analyses concerning your industry as well as whatever other research you can dig up about comparable companies in your area. Particularly if your business is just starting out and you don’t have any personal records to look at yet, this is very important.
2. Categorize All of Your Inflows and Expenses
Take those general numbers you have from your own records and those from the industry and subdivide the expenses into all the specific categories in which they’re spent: marketing, equipment, phone, computing, client meetings, etc. If you have multiple streams of revenue in your business, as does a Vehicle Tracking Solutions franchise, then do the same for cash flow, categorizing where it comes from. In the example of Vehicle Tracking Solutions, a premiere seller of GPS tracking equipment for corporate car fleets, cash flow would be broken into two categories: equipment sales and network services.
3. Make the Forecast
This is the whole point of having a budget: knowing roughly what you’ll have in the future; how it has to be used; and how, therefore, today’s money needs to be spent.
With that categorized list of your expenditures and the regular expenditures of others in hand, you should be able to get an idea of generally how much you spend in each aspect of your home based business each month (or week, if that’s how you choose to break it up). If your records go far enough back, you may even be able to get an idea of how much those amounts fluctuate from season to season. Whether you have fluctuating amounts or one solid average, expect to go a little over that and write the forecasted amounts into your budget in each category. Then, at the bottom of each month, be sure to include that month’s income and expense totals as well as the cumulative expense and income totals to-date.
Some budgeting pros recommend looking 12-24 months out, but certainly don’t go less than 6, or there is really no point in developing the budget in the first place. What you’re trying to do is establish whether or not the business can succeed in the long run if it keeps on going the way that it’s currently running and, if not, what that success will take.
Whether you’re initiating an American Vending Systems business, vending caffeinated treats from coin-operated machines, or starting up a TVME work from home business, selling computerized media centers to local restaurants and pubs, there is one thing that every business must do before all else, and that is build an emergency fund. So as a general rule of thumb, make that the priority on your forecasted budget: building up enough extra money to at least see your business through 6 months of hard times.
4. Make Any Necessary Adaptations from Month to Month
As we said, franchises can often have fluctuations from month to month or season to season, and sometimes those fluctuations can put your business in the red. As you look at your projection, if there seem to be times of year in which your income drops below your expenses, make sure to prepare for those times of scarcity by cutting back on unnecessary expenses in those months and taking more funds out during stronger months and seasons.
The Purpose
The ultimate reason for establishing a budget (aside from getting rid of the unwanted stress associated with not having one) is twofold. One, a budget will help you determine whether your business can make it in your area and market. And two, it will help you lay out the necessary path for reaching success once you find that it is indeed possible. And aside from the basic principles and reason behind budgeting, there is no one set format in which it has to be done; if you do better with a pen and paper, then you can do it that way, or you can use a program like excel if you’d prefer. And if you have questions, your franchisor is always will to help.
Business opportunities aren’t always easy to manage, but doing the little things to get them in order are well worth the effort.
A Home Business Franchise EssentialMaking A Budget - To learn more about this author, visit Candice Clem's Website.
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Whether it’s a home business franchise, an international corporation, or an individual person, anyone with any kind of cash flow and a fair degree of sense has to establish a budget. Without one, money becomes a chaotic mess that is not only hard to manage but is also a terrible and unnecessary source of personal stress and anxiety. Yet getting a budget started on your own can prove to be difficult. If succeeding in business and avoiding the painful headache of being overrun by your financial circumstances both sound like things you’re interested in achieving, here are a few helpful steps to developing a functional budget.
1. Gather Some Information
Whether you’re just starting a franchise business or have been in operation for awhile, scraping by without a budget, here’s where to begin. Obviously you want to know something about your own business, so go back through whatever records you may currently have and look initially at two things: cash inflow and expenses. But don’t stop there. Continue digging for information by looking at market analyses concerning your industry as well as whatever other research you can dig up about comparable companies in your area. Particularly if your business is just starting out and you don’t have any personal records to look at yet, this is very important.
2. Categorize All of Your Inflows and Expenses
Take those general numbers you have from your own records and those from the industry and subdivide the expenses into all the specific categories in which they’re spent: marketing, equipment, phone, computing, client meetings, etc. If you have multiple streams of revenue in your business, as does a Vehicle Tracking Solutions franchise, then do the same for cash flow, categorizing where it comes from. In the example of Vehicle Tracking Solutions, a premiere seller of GPS tracking equipment for corporate car fleets, cash flow would be broken into two categories: equipment sales and network services.
3. Make the Forecast
This is the whole point of having a budget: knowing roughly what you’ll have in the future; how it has to be used; and how, therefore, today’s money needs to be spent.
With that categorized list of your expenditures and the regular expenditures of others in hand, you should be able to get an idea of generally how much you spend in each aspect of your home based business each month (or week, if that’s how you choose to break it up). If your records go far enough back, you may even be able to get an idea of how much those amounts fluctuate from season to season. Whether you have fluctuating amounts or one solid average, expect to go a little over that and write the forecasted amounts into your budget in each category. Then, at the bottom of each month, be sure to include that month’s income and expense totals as well as the cumulative expense and income totals to-date.
Some budgeting pros recommend looking 12-24 months out, but certainly don’t go less than 6, or there is really no point in developing the budget in the first place. What you’re trying to do is establish whether or not the business can succeed in the long run if it keeps on going the way that it’s currently running and, if not, what that success will take.
Whether you’re initiating an American Vending Systems business, vending caffeinated treats from coin-operated machines, or starting up a TVME work from home business, selling computerized media centers to local restaurants and pubs, there is one thing that every business must do before all else, and that is build an emergency fund. So as a general rule of thumb, make that the priority on your forecasted budget: building up enough extra money to at least see your business through 6 months of hard times.
4. Make Any Necessary Adaptations from Month to Month
As we said, franchises can often have fluctuations from month to month or season to season, and sometimes those fluctuations can put your business in the red. As you look at your projection, if there seem to be times of year in which your income drops below your expenses, make sure to prepare for those times of scarcity by cutting back on unnecessary expenses in those months and taking more funds out during stronger months and seasons.
The Purpose
The ultimate reason for establishing a budget (aside from getting rid of the unwanted stress associated with not having one) is twofold. One, a budget will help you determine whether your business can make it in your area and market. And two, it will help you lay out the necessary path for reaching success once you find that it is indeed possible. And aside from the basic principles and reason behind budgeting, there is no one set format in which it has to be done; if you do better with a pen and paper, then you can do it that way, or you can use a program like excel if you’d prefer. And if you have questions, your franchisor is always will to help.
Business opportunities aren’t always easy to manage, but doing the little things to get them in order are well worth the effort.
A Home Business Franchise EssentialMaking A Budget - To learn more about this author, visit Candice Clem's Website.
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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Staging DivaDebra Gould, aka The Staging Diva®, is President of Six Elements Inc., an internationally recognized home staging company. Inspired by many requests from aspiring home stagers wanting to start similar businesses, Gould created the Staging Diva Home Staging Business Training Program. Gould has trained over 1000 Staging Diva Graduates worldwide to start staging businesses. Buying decorating and selling six of her own homes in four years lead to an interest in real estate staging which she turned into a career with the launch of sixelements.com in 2002. Since then she has staged hundreds of homes in addition to teaching home staging training. Gould is the author of several home staging resources including a series of popular ebooks made up of a Design Guide, Color Guide and Portfolio Guide. For more information about Debra Gould visit stagingdiva.com. - Visit Staging Diva's Website |
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John BrennanJohn Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website |
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Stephanie RobeyStephanie Robey is President and CoFounder of Pivot Positive, LLC - an Internet marketing business focused on helping people start work at home ventures. Previously, she was employed at The Search Agency with over 20 years experience in graphic design and 10 years experience in online marketing. She was responsible for launching the Conversion Path Optimization (CPO) unit where she and her team have conducted hundreds of optimization tests for online companies across multiple verticals. She is a successful entrepreneur having started and sold 2 companies and remains on the board of directors of the third, PhotoSpin.com Stephanie began her career in the direct marketing realm creating and producing direct mail for many of the major cable television companies and directly attributes her understanding of Internet marketing to those early offline experiences. Stephanie is a graduate of San Diego State University with a BFA in Graphic Arts and also holds an Executive MBA from the Graziadio School of Business and Management at Pepperdine University. Read Steph's Blog Meet Steph and Dave Sign up for our Free 7-Day BootCamp: Self Employed & Rich - Visit Stephanie Robey's Website |
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Jay Kubassek(Jay's Full Bio: EvanCarmichael.com/jaykubassek) In five years, Canadian-born entrepreneur Jay Kubassek went from selling mufflers at a Midas franchise to revolutionizing Internet marketing with the 2004 launch of CarbonCopyPRO, a online marketing education company, now worth over $20 million with customers in over 160 countries.
As an independent film producer, his upstart film fund Aliquot Films is currently producing a films with Spike Lee and Abel Fererra (starring Ethan Hawke and Dennis Hopper.)
Jay's entrepreneurial spirit is irrepressible. He’s the owner of five companies, a professional speaker and trainer, international real estate developer/investor, extreme sport enthusiast and emerging philanthropist. Jay resides in NYC with his wife Jamie, son Milo and dog Cooper. Visit Jay's official website: www.JayKubassek.com - Visit Jay Kubassek's Website |
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David BarrDavid Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website |
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