If you already have a budget, it’s probably been difficult for you to stick with it for the last several months. Unless you provide products and/or services that have been in great demand since the COVID-19 pandemic took hold, you’ve had to adjust your budget significantly. Better days are ahead, though, and now is a good time to start doing some planning for 2021. While there are still likely to be uncertainties next year, creating a budget will give you a starting point. A budget increases your awareness of all of your projected income and expenses, which may make it less likely that you’ll find yourself constantly running short on funds. Here are some ways you can make your budgeting process more effective and realistic. Use what you already know. Unless you’re starting a brand-new business, you already have the best resource possible: a record of your past income and expenses. Use this as the basis for your projections. Be aware of your sales cycle. Even if you’re not a seasonal business, you’ve probably learned that some months or quarters are better than others. Budget conservatively for the slower months. Distinguish between essential and non-essential expenses. Enter your budget items for the bills and other expenses that must be covered before you add optional categories.
You can use data from a previous year to create a new budget in QuickBooks Online.
Keep it simple. Don’t budget down to the last paper clip. You risk budget burnout, and your reports will be unwieldy. Build in some backup funding. Just as you’re supposed to have an emergency fund in your personal life, try to create one for your business. Make your employees part of the process. You shouldn’t be secretive about the expense element of your budget. Try to get input from staff in areas where they have knowledge. Overestimate your expenses, a little. This can help prevent “borrowing” from one budget category to make up for a shortfall in another. Consider using excess funds to pay down debt. Debt costs you money. The sooner you pay it off, the sooner you can use those payments for some non-essential items. Look for areas where you can change vendors. As you’re creating your budget think carefully about each supplier of products and services. Can you find less costly alternatives? Revisit your budget frequently. You should evaluate your progress at least once a month. In fact, you could even start by budgeting for only a couple of months at a time. You’ll learn a lot about your spending and sales patterns that you can use for future periods. How QuickBooks Online Can Help QuickBooks Online offers built-in tools to help you create a budget. Click the gear icon in the upper right corner and select Budgeting under Tools. Click Add budget. At the top of the screen, give your budget a Name and select the Fiscal Year it should cover from the drop-down list by that field. Choose an Interval (monthly, quarterly, or yearly) and indicate whether you want to Pre-fill data from an existing year.
QuickBooks Online supplies a budget template that already contains commonly used small business items.
The final field is labeled Subdivide by, which is optional. You can set up budgets that only include selected Customers or Classes, for example. Select the desired divider in that field, then choose who or what you want included in the next. Click Next or Create Budget in the lower right corner (depending on whether you used pre-filled data) to open your budget template. If you subdivided the budget, you’ll see a field marked View budget for. Click the down arrow and select from the options listed there. To create your budget, you simply enter numbers in the small boxes supplied. Columns are divided by months or quarters, depending on what you specified, and rows are labeled with budget items (Advertising, Gross Receipts, Legal & Professional Fees, etc.). You simply enter numbers in the boxes that apply. When you click in a box, a small arrow appears pointing right. Click on this, and your number will automatically appear in the rest of that row’s boxes. When you’re done, click Save in the lower right. You can edit your budget at any time. QuickBooks Online provides two related reports. Budget Overview displays all of the data in your budget(s). Budget vs. Actuals shows you how you’re adhering to your budget. We know creating a budget can be challenging, but it’s so important – especially right now. We’d be happy to look at your company’s financial situation and see how QuickBooks’ budgeting tools—and its other accounting features—can help you get a better understanding of your finances.

It’s safe to say that there are a lot of people worried about an impending global recession thanks to the economic slowdown that the ongoing COVID-19 pandemic has brought with it – and your average entrepreneur and startup founder is chief among them. Obviously, it makes sense to assume that with so many people watching what they spend and with so much uncertainty in the air, it’s too risky to launch that business of your dreams anytime in the near future. But at the same time, that idea and reality may not line up quite as nicely as you’d think. In fact, some argue that entrepreneurs actually should not worry about a potential recession for the simple reason that the state of the global economy doesn’t directly impact startups on a large scale. There are definitely factors that will determine whether or not a startup will succeed, but they have less to do with the coronavirus, with an impending global recession, or with any other large-scale matters than you might think. The Positives of Founding a Startup in a Recession: What You Need to Know One of the major reasons why founding a startup in a recession isn’t necessarily the major issue you thought it was going to be has to do with the fact that products and services are generally cheaper during these periods of economic downturn. Smart entrepreneurs aren’t scared by this – they’re ready and waiting to take advantage of it. While larger companies are looking for any opportunity to retract and shed costs, those struggling businesses will likely sell off a lot of their assets at bargain basement rates. Retailers and other organizations will usually drop their prices in an effort to move as much inventory as possible before it’s too late. Interest rates fall to their absolute lowest, meaning that opening new lines of credit (or borrowing money in general) has never been easier. Sure, none of this is exactly positive for those larger organizations – but it’s good news for your new startup that couldn’t have come along at a better time. Provided that you already have a plan in place, you can save on costs and still bring your vision of the perfect company into reality at the exact same time. Top Talent Will Always Be Looking for Opportunities Along the same lines, your startup will obviously need high quality employees to work for, though depending on the financial side of your business, getting to that point may often feel easier said than done. But in the event that a global recession does occur, this is another one of the major reasons why this could actually be good news for your efforts. As soon as a global recession sets in, those larger companies are going to begin shedding workers – and fast. As unemployment rates rise across the country, it means that there will be a far larger number of qualified, passionate, and talented people available to fill whatever positions you have available. By putting in the effort today to put a strong hiring plan in place, you’ll know exactly what type of candidates to go after as soon as they become available. Not only that, but you’ll likely be able to secure these people at lower rates than you would have had the job market been stronger in your industry. In fact, a lot of people agree that this is actually a great opportunity to bring in a co-founder to compliment your skill set. Never forget that a big part of your success will ultimately be determined less by what you do and more by who you’re able to surround yourself with. If you’re able to attract qualified individuals who A) believe in what you’re trying to accomplish, and who B) fill in a lot of the skills gaps that you yourself possess, you’ll be in a far better position than you otherwise would have been – and earlier on in your company’s lifecycle as well. Entrepreneurs Solve Problems. That Will Always Be True (and Necessary) In the end, the same factors that will impact whether a startup can succeed are as true today as they were before any of us had ever heard about the coronavirus. They are and will always involve your founding team and their ability to solve a problem for a paying customer. Starting your business with a qualified, well-balanced, and experienced team is something you simply cannot overstate the importance of. People will always have problems and they will always look to new and innovative companies to help solve them. Yes, the problems may change given what is going on in the world – but the fact that people are looking for real, effective solutions will not. In other words, it’s still all about the product-market fit, the same as any other time. If your startup was founded on a genuinely innovative idea that spoke directly to the heart of a universal problem that a lot of people are experiencing, it will find its success. It may take a bit longer in a global recession, sure – but the odds are very much in your favor. Oftentimes, achieving this product-market fit has little to do with wider macroeconomic trends, which is exactly why a recession is probably a far better time to launch your startup than you thought it was going to be. Once you also remember the simple fact that all recessions eventually come to an end – and that those startups that were founded on a stable foundation are in the best position to rebound at that time – you’re looking at a very exciting position for any entrepreneur to be in.