By Aiden White

Uncertain times breed unexpected setbacks and expenses. A good budget can help you to overcome those setbacks and keep your business running smoothly in a competitive market. Ever since the COVID-19 pandemic, nothing is certain anymore. So, a business budget is mandatory now. Here are four budgeting tactics that can help your business stay afloat during an unpredictable time.

1. Analyze Your Business Costs

When you’re ready to create your business budget, it’s important to calculate the cost of your projects accurately. You have to do research at the micro-level. And, when you’re evaluating the cost of your projects, make sure you do it correctly. Don’t underestimate the cost of running your business. And, don’t forget to include marketing expenses.

If you want your business to succeed, then try to run it at minimum cost. This will help your business to survive in the long run. Cut down on all discretionary expenses and make sure you pay off the entire balance every month. This is one of the most important tips for budgeting with a credit card. Make sure you get your business partner on board so that he can also give his input regarding the credit card purchases. A few purchases might be unnecessary, as your partner may point out. This will help you to save money.

2. Evaluate Your Expenses

In the initial stage of the business, your expenses are likely to be more than the revenue. And, it is also easier to calculate your expenses rather than profits. Split your expenses into 2 parts – fixed and variable. Next, add up the marketing and advertising expenses. These expenses can be double or triple of what you have estimated. So, you must allocate a good amount for these expenses. Insurance and legal expenses will also be there. Make sure you set aside an amount for these sectors too.

If you’re using a credit card for covering business expenses, then make sure you use it only for the planned purchases. Set a spending limit so that you don’t go overboard.

3. Estimate Your Cash Flow

This is the income of your company. This is the money your business earns from various sources. Without having an idea of how much your business earns throughout the year, it becomes difficult to plan your expenses or schedule payouts.

First, you need to estimate your revenue. You can make two types of projections. The first one is conservative, and the second one is aggressive. Aggressive projections will help motivate your partners and investors. The conservative projection takes into account only a realistic estimate of your revenue.

Aggressive revenue projections help to boost team morale. But you need to do a reality check to calculate your fixed overhead expenses. Calculate your gross profit margin to see if your business is growing gradually. Use this formula to get an accurate figure:

Gross Profit Margin = (Revenue – Cost of Products Sold) / Revenue

If your gross profit margin is going up every month, then it means that your business is doing great.

When you’re estimating the cash flow of your business, you have to keep various factors in mind. For instance, you have to consider seasonal fluctuations. During the peak season, the business revenue will be good. Again, during the lean season, business revenue will be quite low. So, you have to plan your expenses accordingly.

In the peak season, you can hire temps to increase production and generate extra revenue. In the lean season, you can adjust those extra expenses easily. Those extra temps won’t be there during that time.

Remember, it’s not an easy job to calculate the cash flow of your business. Apart from seasonal fluctuations, you have to take into account payment defaults and costly mistakes. When you’re running a business, there are so many things that you have to look after. As such, it’s easy to make expensive mistakes. You may give double orders for the same products with your credit card in a hurry. This is an added expense for your business. Again, some clients disburse payments after giving several reminders. Some clients make late payments habitually. Some clients may not make payments at all. Just like in a household budget, you have to set aside money for your business budget as well for these uncertainties. You have to run your business amidst the payment defaults and economic uncertainties.

One way to avoid payment defaults is to impose late payment charges and penalties. This would discourage clients from making late payments. And, if your clients still make late payments, then it’s better to not make business deals with them. When you’re running a business, you have to make some hard decisions to run it smoothly.

4. Set Up Contingency Funds

Setbacks and mishaps are normal during uncertain times. When the economic situation of the country is toxic, the contingency fund can help to keep your business safe. If you don’t have any idea about how to create a contingency fund, then you can get help from your project managers. They have adequate knowledge of business operations. So, they can show you the areas where you can save money to build your contingency fund. They may even give you lucrative ideas to revolutionize your growing business without any additional expenditures.

A word of wisdom: As a newbie entrepreneur, there are various things that you must know. Some may even annoy you but you have to overcome them tactfully. For instance, your business budget may not work as per your plan. You may not be able to follow it diligently in the first few months. However, instead of getting frustrated, you should review and adjust your budget on a periodical basis. You need to make several adjustments before it comes truly perfect for your business.


There are various tools available nowadays that you can use to create business budgets. These tools take seasonal fluctuations and other miscellaneous expenses into consideration. Moreover, these tools can help to create annual budgets, monthly budgets, project-based budgets, and multi-year budgets. The best part is that these budgeting tactics don’t allow for additional expenses whimsically.