Did your laundromat have a budget in 2014? If so, how did your finances fare during the calendar year? Ideally, everything went well – but we all know that sometimes we hit bumps in the road.
If your budget wasn’t perfect – or if you simply have some changes that need to be accounted for – then now is the right time to address this critical component of fiscal planning. The new year is finally upon us, and that means you have 12 full months to implement a new strategy and ensure your laundromat stays on track.
Read on to learn how you can create a fantastic business budget for 2015:
How is the laundromat industry?
First up on your list for the new year should be a careful analysis of the laundromat industry. According to the California Small Business Development Center, a comparison of similar laundromat businesses can be the foundation to your 2015 budget.
“Use competitors as a tool to create a great 2015 budget.”
Other competitors will often have similar financial plans – so take note of any laundry news in order to guide you moving forward. The SBDC recommended checking out your local library for information on fellow businesses, or researching data using the Internal Revenue Service (IRS). Competitors can show you the right – or wrong – percentages to dedicate toward marketing, utilities, rent and other costs.
As you take the pulse of the laundromat industry, remember that no business will be exactly like yours. This is one reason why you must ensure a little bit of flexibility in your budget. The SBDC stressed the ability to improvise if the need arises. A budget is a guide – and if you can adhere to it strictly for all 12 months, then that’s wonderful – but you may have to make changes at the last minute. Prepare to be flexible in the new year.
Monitor the important elements of your budget
Once you have a foundation for your budget, you should hone in on a few specific elements. According to CPA and advisory firm Carr, Riggs & Ingram, these include:
Your income is vital to your budget. In this section, cover sales, margins, expenses and profits, among other items. In January, figure out if 2015 will be a year of growth or a year when you hold steady, CRI explained. Keep a close eye on your profit margin as the months progress.
2. Cash flow
Next up is cash flow. This section will have your cash inflows and your outflows. For instance, it must include your financing and your external investment sources. You want to monitor cash flow because it can be a telling factor if you can afford new equipment and other additions at your laundromat.
3. Balance sheet
Finally comes your balance sheet. This part of your budget will include all your assets and liabilities. On a large scale, the balance sheet provides a snapshot of the financial health of your laundromat. Looking at this section will help you determine whether or not your budget is feasible, or if your debt is too high, for example.
Your laundromat needs a budget. Before it is too late in 2015, make sure you have a comprehensive and clear document that will help guide you during the year.