You've started your money making online business. You've taken care of the organizational things. Maybe you've registered a corporation, an LLC or a partnership. It doesn't matter. Following that you've set up your accounting system so that you are ready to keep track of your money making online business transactions. From a management point of view now you need to start planning for your business future. You need a budget.
When I talk about a budget, I am talking about the total concept, not just budgeting expenses. This then requires that you start by forecasting your expectations in sales. If your money making online business has been operating for a period of time, you will have a basis for forecasting your sales expectations. If not, I suggest you do three forecasts. Maybe your first is zero sales. The second forecast is a maximum that seems reasonable to you. The third would be somewhere between the first two.
Take these three forecasts and develop an expense forecast for each one. Case 1 where you forecast zero sales will require you keep expenses down to a minimum and within an amount, which is the maximum you can afford with no money coming in. Case 2 allows you some leeway, hopefully, to put aside funds for expansion of your business and for future investments. Obviously, in case 3 your will need to forecast expenses in line with this middle ground.
You need to prepare these expense forecasts as detailed as you possibly can. The more detailed you can make them the easier it is for you to see what you have missed. This not only will help you improve your budgeting in the future, but will help you evaluate better how you are doing against what you had expected to do.
As you get more experienced in this budget process, you will also improve your ability to understand what to expect in your business, and by understanding areas where you have not met your expectations, help you see what you might do to help you achieve them in future.
Budgeting is not a science. It is based on understanding your business and what you can reasonably expect from it. It also will help you to control your expenditures so that you remain within your own financial model and avoid the everyday temptations to buy this or that latest money making scheme that does not fit into your planned business.
This does not mean that you cannot vary your plans. But when tempted to buy something not in your plan, you should be in much better shaped to decide firstly, if you can afford it, and secondly, how it fits into your overall plans and strategy.
So by all means start your money making online business with a comprehensive budget program. It will do wonders toward making your money making online business a huge success.