Benefits of a Budget in your Vending Business

In business, a budget is generally defined as an itemized summary of estimated or intended expenditures, for a give period of time, coupled with an estimate of the sources of revenue to support the expenditures.

The real benefits

The main aim of a budget in your Antares business is to keep the company out of financial trouble. In addition to this there are many more benefits available to the business that implements budgeting. Some of the obvious benefits include goal setting, capital and debt planning, early warning of problems, early warning of opportunities, employee incentive and bonus management, contingency planning and the ability to ask the right questions when problems or opportunities arise.

The budgeting process

In an annual budget for your Antares business, you can start with a current set of financial statements (that presumably show how the business is presently performing) and then you plug in the realistic improvements that you would like to achieve during the next 12 months for each line item. As the year progresses, you must post your actual, monthly or quarterly operating results, and compare your actual performance with the amounts you budgeted for each revenue and expense line item, and each balance sheet item. After you have done all this, you can then calculate the differences. These differences are referred to as budget variances. An astute Antares operator should be able to look at the budget variances to identify and act upon any problems or opportunities.

A key benefit: extra lead time

If you’re budgeted increases in sales requires that you take on additional debt to finance the purchase of equipment, this reality will show up as soon as you have constructed your budget. It would be an added advantage to know that you will need to purchase equipment, so that you can borrow additional funds long before you actually need the Antares equipment or the money.

Professional managers will use the additional lead time to source equipment and debt at the most advantageous cost, and the best available terms. This will make him do much better than his less sophisticated competitor.