When you have a small business, a budget can be a valuable tool to not only keep you on track, but also help you to grow. However, when the money that comes into your business fluctuates, it can be hard to plan ahead. Fortunately, there are some ways that you can create an estimated budget even if you have a variable income. Here are some tips to help:

• Know your averages: It’s important that you know what the average income you can earn is for each activity in your business, as well as average expenses. For example, what is the average amount you earn per transaction or party? How much do you spend on average per month on business supplies? You may need to do some research to get these numbers, if you don’t have your own historical data. When you know your averages, you know how much you need on your calendar each month to earn an estimated amount, and can do the things necessary to get those things onto your calendar.
• Know your fixed and variable costs: Are there things you pay for each month, quarter, or year? Things like your cell phone bill, rent, or website fees are fixed costs. You may have other expenses each month that change as well, like marketing fees or other one-time or fluctuating expenses. These are your variable costs, and you may be able to anticipate them by looking at how much you spent the previous year on certain seasonal events. Know how much is going out each month, and be sure you have enough income-producing activities scheduled to exceed these expenses.
• Write it all down: We shared with you last week a Direct Sales Business Budget Worksheet. Use it! It is essential that you keep track of the money coming in and going out from your business. Small business owners that avoid the financial details are far more likely to fail than ones that pay attention. Record both your estimated and actual income and expenses, and make adjustments as necessary.
• Be conservative in your estimates: It’s important to have some extra income set aside for unanticipated expenses, so you have some flexibility in your business. So even if you think you’re going to earn a certain amount, plan for the fact that you will earn less than you anticipate. And even though you think your expenses will be a certain amount, plan that they will be greater. It’s better to have more money than you anticipate at the end of the month than to have less. By estimating conservatively, the amount you have at the end of the month will be closer to what you expect.

Small business owners and entrepreneurs often neglect the important step of creating a budget because it doesn’t seem like the most exciting part of business ownership. Yet it is an important element of the overall health of your business.

As part of National Financial Literacy Month, we at DSEF are proud to sponsor the Nevada Women’s Money Conference. This important event helps women learn the skills they need to create a secure financial future for themselves and their families. Best of all, we’re providing full scholarships to the conference for women in DSA member companies! For more information, visit this page: http://dsef.org/what-we-do/womens-entrepreneurship/nevada-womens-money-conference-a-new-vision-for-women-and-money/ And please, pass this along to the women you love in Nevada. This is an amazing opportunity that can make a HUGE difference in a woman’s life! Thanks for helping us spread the word!