If you are the owner and operator of a small business such as offering your services as a personal fitness trainer it can be all too easy for your personal and business finances to mingle.
It can sometimes be the case that a number of small business owners won’t create a budget that creates a distinction between their personal and business finances, but that is not a scenario to be recommended.
Here is a look at why you need to create a budget for your fitness business, including how it helps you to control your spending, plan for emergencies, and see exactly how profitable your business really is.
Creating a budget is the only way to go
Regardless of the type of business you run, there is one universal truth that applies to every entrepreneur and that is the fact that a budget is genuinely the only surefire way of ensuring that your money is spent wisely and keeps you in control of your spending.
Budgets are often viewed as boring by some people, or scary to others who don’t want to really know how out of line their financial situation might be, but if you are running your own personal fitness business, for example, you have to put aside any preconceived ideas about budgeting and set about tracking your finances and having a plan for going forward.
Stop the wastage
If you put yourself in a position where you know where every dollar you earn is going that will give you a strong level of control to see where changes need to be made and where money is being wasted.
A budget will help you to monitor your spending habits and if you are disciplined enough to keep on top of the situation and check your figures at least once a month to see if you are on track, you will be giving yourself the best possible chance of improving your financial status in the long run.
Business and pleasure
If you are a personal fitness trainer and spend your time traveling between customers and doing all the normal things like buying fuel, eating out, and ordering clothes, for instance, it can sometimes be hard to create a distinction between what expenses are for business and what is classed as personal expenditure.
It is a good idea to try and separate out your spending so that you can account for money spent as part of your regular personal lifestyle and what costs you are incurring as part of your work.
Some expenditures will be easier to identify than others, but you should aim to list all of your expenses and allocate them accordingly when you create a budget for your business and one for your personal finances. Make sure to shop around online where you can lower your expenses, such as buying your fitness trainer insurance online instead of through a business broker.
If your business is going well and you are enjoying a regular income that can help you to use your budget to set some short-term and long-term goals.
Whatever your plans happen to be, from budgeting for a vacation, to saving enough money for your retirement, the only way you can successfully work out how much you can afford to commit to these goals each month is to use your budget to tell you what cash you have available.
The amount of money you earn each month or each year is almost irrelevant in terms of setting financial goals, as a budget is designed to be flexible and adaptable to your own level of income.
A budget helps you to make plans and keep more of the money that you have worked hard to earn.
Expect the unexpected
If you are the sole source of income and when you are not working your business is not generating any revenue, you need to consider a contingency plan that gives you a financial buffer in that situation.
As part of your budget, you should look to set aside a certain amount of cash that you can put away each month into an emergency savings fund. Ideally, you want to have the equivalent of about three months of income put away in a savings account that you can access instantly if you need to.
That way, if you can’t do your normal work as a fitness trainer due to unexpected illness or an injury, you have a financial backup to see you through in the short-term.
Yet another reason why a budget is such a good idea.