Proper financial management is essential for the success of any business endeavour. Most businesses, particularly small businesses, that do not make it past their first or second year of operation, fail because they have not taken the necessary steps to plan and manage their finances. One of the first and most important steps in financial management is planning a budget for your business.

Budgeting should be done on a regular basis, but most especially at every important turning point that your business faces, for example when considering investing in new equipment, taking on a new lease, or considering expansion. Taking the time to properly prepare your budget regularly will help you to determine the capital that you have available, whether or not you have funds enough to achieve your business goals, and if not what steps can and should be taken, helping you to gain and maintain control of your business.