Wyoming Business Tips for Oct. 23

A weekly look at Wyoming business questions from the Wyoming Small Business Development Center (WSBDC), part of WyomingEntrepreneur.Biz, a collection of business assistance programs at the University of Wyoming.

By Bruce Morse, WSBDC regional director

“I am starting to work on my budget for 2017 and always struggle with it. Do you have any tips to make that easier?” Harold, Buffalo

First of all, I’m glad to hear you are starting to think about your 2017 budget. Now is a great time to begin working on that. Many businesses never get around to it and simply “hope it works” next year.

It sounds like you have an existing business, so at least you have some historical numbers to work from. I would start with this year’s information, modifying it depending on what you know about the upcoming year or decisions you plan to make. This can be based on price adjustments, new contracts you either have or anticipate, or marketing campaigns that you hope will drive new business to you.  Conversely, if you know that revenue will be down for some reason such as losing a big client, a fall in prices and so on, you will want to account for that as well.

If you have a business with some seasonality, review your accounting reports for the last few years to see what that pattern looks like. If it’s reasonable to assume that will continue, plan accordingly. 

On the expense side, what changes do you anticipate? Can you source a new supplier that might improve your gross margin, negotiate a better deal with your landlord, or realign your marketing spending to reach more targeted customers, and so on?

For new businesses just starting out, projections can be a bit more difficult. The expense side is always a little easier to pencil out; however, based on the nature of the business, average ticket size, location, capacity, inventory levels and other factors, a sound estimate can be arrived at. Let’s face it: Nobody knows for sure what the future holds, but you want to make as good a guess as possible based on the information available, and then monitor it closely as the year progresses so you can make adjustments if necessary.

If you are struggling with this process, need some tools to help you organize your information or simply want to bounce your thoughts off an impartial third party, contact your SBDC adviser for assistance.

A blog version of this article and an opportunity to post comments are available at www.wyen.biz/blog1/.

The WSBDC is a partnership of the U.S. Small Business Administration, the Wyoming Business Council and the University of Wyoming. To ask a question, call 1-800-348-5194, email wsbdc@uwyo.edu, or write 1000 E. University Ave., Dept. 3922, Laramie, WY, 82071-3922.