Archive for Finance

Budgeting effectively

Posted in Finance with tags , , , on September 2, 2010 by virtualcitypa

Business budgeting is very important in every company regardless of its size. Good business budgeting plan can business owners and executives achieve their goals and stay in competition despite difficult or unexpected financial situations.

Business budgeting is basically financial planning. It can be simple or complex depending on the nature of your business but it is best if you keep the budget presentation simple and clear. Above all, use caution when creating your budget. Make sure all information is accurate and up-to-date for effective business budgeting.

Below are several budgeting tips that you can try:

• Be realistic

Business budgeting should be based on numbers that is backed up by sensible expectations. These expectations should be based on both previous business financial performance and projected business developments.

• Business budgeting should be time-bound

Business budgeting should be prepared under a specific timeframe. The budget is most of the time based on the company’s fiscal year or you can also project a budget on a monthly or quarterly basis.

It is recommended that you break down your budget on a monthly basis even if you have already prepared it on your business’ fiscal year. To make your business budgeting easy, consider using a financial program or software.

• Make an estimate on your income and expenses

Business budgeting relies on your expenses and income within a specified timeframe. Your income should include the payments gathered from sales, interests, accounts receivable and other sources. For the company expenses, all funds that leave the company should be included. Such expenses include payroll, materials, utilities, real estate so on and so forth.
Regardless of how cautiously you plan, there is not doubt that you will come across with unexpected expenses as you run your business. This makes it very important for you to save some allowance for them in your business financial plan.

Also, it is a good thing to consider the time when both income and operating costs will be incurred. For instance, if you run a business that is seasonal, there are months wherein your sales will definitely go down. In this case, it is important to make sure to adjust the budget accordingly for the lean months.

These are just some business budgeting tips that you can try. To be honest, business budgeting is not easy but if you master it, you can be sure that you will encounter lesser financial problems in your company.

http://www.linkroll.com/budgeting/tips-for-an-effective-business-budgeting.php

Advertisements

Price setting

Posted in Business start up, Finance with tags , , , on August 21, 2010 by virtualcitypa

Finding the right balance of offering a service at a price that is right for you and the customer is not always easy to find when you are just getting started. However, over time, an equilibrium will be reached where you realise your niche where clients are either happy to pay a nominal premium for a quality service or otherwise.

smallbusiness.co.uk has some useful hints to review whilst you are setting your strategy:

1. Analyse the position your product holds in the market.

Are your target customers those who are looking for reliability? Has your product already achieved an established image in the eyes of the market? Do buyers view it as good quality, prompt service, stylish, say?

2. Analyse your product.

Are you planning modifications or alterations which could alter its reputation or relative position in the marketplace?

3. Analyse the competition.

How do their products rate against yours? What is the relative price structure in the market?

4. Decide your pricing strategy.

Where in the price range are you going to pitch your price? Is it going to be average for the market, 5% less than the average, 5% above the average or a premium price, 25% above the average?

5. Choose some specific prices.

Estimate volume of sales, profit margin and costs to forecast the level of profits for each price.

6. Choose your price.

7. Are you be able to test market the price in a small area of your market?

This would allow you to gauge customer reactions.

http://www.smallbusiness.co.uk/channels/sales-and-marketing/finding-customers/guides-and-tips/20707/guide-to-setting-prices.thtml