Failure to plan, they say, is plan to fail. While this statement is true of many areas of life, it is particularly true in the area of financial management.
The business world is one that cannot do without money, and the success or failure that an organisation experiences is largely dependent on its ability to plan and use its finances well. For this reason, efficient management of finances is critical to the success of a business. One important aspect of financial planning and management is budgeting.
Budgeting
Budgeting, simply put, is the planning of how money will be spent to meet certain goals or aims. For budgeting to be done in the strict sense, there has to be goals set, an estimation of the various things it will take and what it will cost to achieve those goals. It, therefore, suffices to say that without a budget, there really is no business plan.
Sadly, many Small and Medium-scale Businesses do not really appreciate or understand the importance of budgeting the role it plays if their businesses are to succeed and grow.
Women entrepreneurs are also greatly affected in this, as they do not often have guides to help them. The following are ways in which proper budgeting helps businesses grow.
Assess financial goals
As earlier stated, business is all about finance; it takes money to run it and the expected gain from the business is financial in most cases. This being the case, budgeting becomes very to properly assess whether profit has been made or not. If profit has not been made, then you can plan ahead on what to do about it.
Accountability
There is nothing as bad as having a business that does not or cannot keep or give account of its activities. Put simply, it is a recipe for failure. Budgeting helps to ensure accountability, as it determines what is given for various activities/plans or to the units that make up the organisation, in the first instance. The accountability part comes when the report on how the budget was implemented is demanded.
Attract investors
The aim of business is to make a profit and, if possible, grow the business. In certain instances, outsiders may pick interest in your business and may be willing to invest in it. However, before any investment is made, they usually would want to see the financial plan and budget of the business, as no one is willing to invest in something that would not yield profit in the future. Financial books (budget inclusive) are usually indicative of how well planned and strategic a business is.
Make better financial plans
In running a business, it sometimes becomes very important that strategic moves be made to further enlarge a business or to seize opportunities that present themselves in the course of administering a business. Usually, these plans would usually involve spending a large chunk of money. However, it is your budget that first determines whether a plan or move is feasible or not.
Conclusion
The business world is a competitive arena where failure may prove fatal to the organisation. Already, many women come in at a disadvantage because of the personal, family and societal challenges that they may face, coupled with the fact that sometimes, there is no one to guide them. This makes it important for anyone who intends to be involved in business (especially women) to be very prepared before delving into it. This is why it is important that a business owner should know how to plan and prepare a budget for the business.
At Creativespace startups, we develop and run several programmes that aim at ensuring that female gender does not just partake in business but also excel in it. One of our major objectives in our women-focused programmes is to properly guide female entrepreneurs on how to spend and invest their money, grooming them into strong financial managers.
Running most of these programmes cost a lot and we appreciate individuals, organisations and governmental bodies, who come in to support us at every point in time.
We are open to various forms of partnerships, donations and collaborations. You and your organisation can be part of what we are doing to build the Africa of our dream.
