Simply Junior

In order to create a high-impact plan you need to optimize your budget. Yes, expensive one-time marketing techniques such as glossy brochures or radio blitz’s sounds like a great idea; however, they are extremely expensive and will drain your marketing budget. You will be better off using low-budget marketing strategies to get your message out to consumers on a regular basis.

There are various reasons why small businesses should utilize low-budget marketing techniques:

-Expensive ad exposure does not necessarily translate to increased sales and revenue. For every dollar that you spend on marketing you should see an increase in your sales as a result of the marketing strategy implemented.

-Your target audience – niche specific to your small business and the products that you sell – will need to see advertisements for your product at least seven times before they build enough trust in your company to influence a buying decision. In order to market to your customers at least seven times, a one-time high-impact plan will not allow for this, therefore, necessitating the use of low-budget strategies.

-Use multiple marketing channels in order to increase your small business’ marketing impact. Post banner ads online, advertisements in the newspaper and magazines, use social media such as facebook, twitter, YouTube and blogging. The more you can stretch your marketing dollars and expose your potential customers to your small business and your products, the more revenue you will generate.
A few quick suggestions:

-Piggyback on another company’s marketing campaign. This can save your company time and capital.

-Target the right market. Find customers who are easy to identify and affordable to market to. Go for small niche markets.

-Make your small business newsworthy. Have something unique about your company that will make it newsworthy and incite people to talk about your company creating a buzz around your small business.

-Joint ventures are extremely powerful, form one. This will help you market your business. Joint ventures will lower costs allowing your business enter new markets and create new distribution opportunities.

-Maximize your referrals from current customers to potential customers. Testimonials and referrals from current customers speaks much louder than any fancy ad campaign.

Creativity will ultimately allow your marketing strategies to pay off for your company. You don’t have to have the largest budget in order for your small business to be successful.

Saving money is a problem for a lot of people, and in the U.S. today, personal savings are at record lows. If you want a comfortable future for your family, it is imperative that you learn to save. If you plan to save, you must first plan how you spend. Developing a monthly budget is key for ensuring you have money left for savings.

Before You Start

* Discuss your plan to save with the rest of your family and make sure they agree and understand the importance. If they recognize the purpose behind any sacrifices they must make, they are more likely to stick with the plan.

* Calculate your savings for prior year. How much did you set aside, if any?

* Make debt a priority. Use your tax refund, etc. to pay off expenses in order to pave the way for greater savings.

Pay Yourself First

When creating your budget, plan to pay yourself first. In other words, pay your bills and then pay your savings account – BEFORE you buy that new TV or take that weekend trip. Saving money now will ease financial strain when something big, like college or a new home, comes up in the future.

Get Started

It takes some effort to construct a family budge. There are many computer programs and other electronic aids to help you, and of course, you can always opt for the old faithful pen and paper. Find a good example of a budget worksheet online to give you a guideline to go by, but most of all, choose a plan that will be easy and efficient for use and compliments your needs.

You will first need to consider your monthly income. You should calculate every penny that goes into your pocket. This information will help prevent you from spending more than you make.

After you know your exact income, you should track your spending. Take at least a month to determine how your money disappears. Make a record of everything from bills to bowling in order to plan the most efficient budget.

Organize your spending into categories to include both the things you need and must pay for, like your food and your mortgage, and also the things you enjoy but could live without if you had to, like a monthly manicure or eating out twice a week.

Spend less = Save more

After you’ve looked at your detailed spending list, you can determine whether your debt is greater than your means. If you don’t make enough to cover you car and house payments, you may need some aggressive action. For most people however, the overspending comes with the ‘incidentals’ and the luxuries we’ve all grown accustomed to.

Your incidental spending will be the easiest place to cut back and make room for saving. You can start by canceling magazine subscriptions and going out to eat less often. Rent movies instead of going to movies to avoid the snack bar pitfall. You can always pop popcorn at home.

Dig Deep

You may be able to reduce spending in other areas as well. You might want to consider more economical shopping and clipping coupons. Try carpooling more often to save on astronomical gas prices.

Credit card debt may be a problem for you as well. You should have a ‘pay off’ goal and may want to consider shopping around for low balance transfer rates or cards with no annual fee. CardWeb has a great list of low rate cards (1-301-631-9100 / online at cardweb.com).
Low introductory rates that skyrocket after six months are a common pitfall. If you switch to a low rate card, make sure it’s for the duration of the balance.

Consider a home equity loan for a tax deduction, or look into a consolidation loan. Be certain you can make the monthly payments before going this route. Banks have the power to foreclose on a home equity loan in 90 days if you have miss your payments.

If you’re struggling with debt and it’s thwarting your effort so to save, the National Federation for Credit Counseling (call 1-800-388-2227, or visit nfcc.org) can help you set a budget and organize payments with creditors for a small fee. Once you start to pay off debt, you can use the extra money to build savings.

More and More

As you ‘get on a roll’ with your budget, you will start finding room for more savings and anticipated needs. You may even be able to set money aside for these anticipated needs. You will still need to pay yourself first, but you may also begin to set money aside for that new car or the boat you’ve always wanted.

If you set a savings goals for the long and short-term, you will likely save more. Studies indicate that people who have goals, tend to fair better in the long run.

You will have to manipulate your budget as your circumstances change. Don’t allow your plan to become stagnant and end up back where you started. Stay on top of the budget to stay on top of the savings.

Summary

One of the greatest problems a new couple faces is agreeing on how to manage money.

It is very important for a new couple to agree on how they will budget, spend and save their money. If one person in the marriage is a spender and the other is a saver there definitely will be tension.

The best way to ease this tension is to agree on a plan ahead of time and stick to it. A new couple must agree on a budget plan, a savings plan and how money will spent.

Step One: Begin



Begin with each of you sitting down, taking a writing pad and describing how you feel about money. You need to include your views on spending, saving and priorities. Especially, your priorities. You must agree on your spending and saving priorities or the relationship is doomed. The only exception might be, you are extremely wealthy.

Step Two: Share your ideas about money, spending habits, budgets and savings with each other.

It is very important that you understand what the other one believes about money. No matter how small, do not ignore differences. You must discuss each difference and work together on the solution. You must agree on the solution for each difference.

Step Three: Develop a budget that both partners can agree on.

If both partners cannot agree on a budget, it won’t work. You must be in agreement on how the money will be spent and how money will be saved. Don’t be surprised if this step takes some time to get right. But better now than later.

Step Four: Work out a savings plan that will benefit both short term goals and long term goals.

Whether you agree or not you must have a plan for saving. So discuss how you want to live your final years. Your desired future lifestyle will determine the amount you save. Agree on how much, how often and where.

Step Five: Understand how the other partner views spending.

How each partner spends money can be a deal breaker. If you are a saver and your partner is a spender, you will be very frustrated. You need to understand why your partner likes to spend and tell them why you need to save.

Be honest with each other and try to create some rules for spending too much or becoming miserly. If you can understand each other’s feelings about money, might just make it.

Remember, if you neglect to discuss money matters before you enter into a long term relationship, you are destined for trouble. Money issues can be more devastating than adultery.

“I only have a small business, I don’t need a budget.”

“I don’t have enough money to budget.”

For many small business owners, the word “budget” is something for the bigger company – maybe they’ll have one when their business “grows up.”

What is a Budget?

The simple explanation is a budget is a plan for how you will manage all financial resources and all expenses for your business. The basic equation that you want to demonstrate in a budget is as follows:

(estimated )Sales minus (estimated) Expenses = Profit (or loss)

How to create a Budget

If this is your first time to work on a budget for your small business, you might work from the perspective of having to list cost of goods or services plus all of your operating expenses to start the process.

How much does it take to operate your phone line? What is the cost of other utilities? How about the cost of a company vehicle, or what is the cost of transportation if you’re using your personal vehicle to also serve as a company vehicle. Do you need any supplies or inventory to operate your business? How about any employee payroll, payroll taxes or independent product or service providers? Remember to include everything you spend money on to operate your business even if you allocate some of the expenses to “petty cash” expenses, such as parking or bridge tolls while traveling to see clients.

I recommend that you create annual budget, as opposed to a monthly budget, so you can identify any expenses that you may have that come up only once or twice a year such as insurance and include them in your list of expenses. This allows you to amortize or spread the cost of this out over several months so that you can plan ahead for the expense.

As you work on your list of expenses keep in mind that these are the expenses that are necessary to operate your business. These should not be your “wish list” unless you want to budget in some expansion or growth. You may want to create a budget with just the necessities and another version of your budget with expansion expenses listed so that you can see the cost of both separately.

With a dollar figure to work with of your total expenses you are able to set the standard for or evaluate your sales figures. If you are new to your business you may need to use the dollar amount of your expenses to help you determine what your sales need to be in order to cover all costs and show a profit. If you have been in business for a while you can evaluate whether or not you are producing a profit by looking at historical sales figures.

As you conduct business during your budget year you should compare your actual income and spending with what you estimated. This will allow you to manage your spending so that you don’t over spend and cut into or eliminate your profits. You will also be able to see if sales have met expectations in order to cover expenses and still remain profitable.

Who should Budget?

Every small business owner should budget, no matter the size of business. I have heard some small business owners say their business is too small to budget, but that is not true. If you don’t have a written plan for what your financial obligations are and how your revenue will cover those obligations and leave some money unspent, then your business will never grow. In fact, you may out-spend your revenue and put yourself out of business.

Why Budget?

Budgeting for your small business gives you control over your finances. By looking ahead to what you know or can reasonably estimate what your expenses will be, you can then make financial decisions that will keep you from over-spending, or give you the freedom to invest in the growth of your business.

When Budget?

Every small business owner should have a budget to start their business and then review it annually. I recommend that small business owners review their budget several months before the end of their fiscal year. When I say review the budget I’m talking about comparing projected budget with actual. In the comparison you can see if your estimates were realistic. You and your CPA can also plan for last minute tax strategies, or plan to implement strategies in the up coming year’s budget.

The Goal in Budgeting

Remember, the goal of having a budget is to stay in control of your finances in advance. Setting the standard for your spending and revenue and having a tool to compare with actual will give you the control that you need to stay profitable. At the very least it will give you an indication of whether or not your business is actually profitable and not just busy.

Copyright 2005 Melody Campbell