Resolve to Plan for Your Future— FINANCIAL PLANNING AND BUDGETING TIPS FOR THE NEW YEAR

By Rich Mino, Del Mar Financial Partners, Inc., San DiegoThe end of each year is a chance to take pride in the events you’ve planned and reflect on the great relationships you’ve built with your couples along the way. As a small business owner, it’s also the time to review your financials and plan for the year ahead. Reviewing financials may seem daunting, but below are four tips to make this process painless as you prepare for 2013.Get a Grip on Your Monthly IncomeWouldn’t it be great to know how much income you can depend on each month? As a sales-based business owner, however, this number varies from month to month depending on several factors including the number and size of weddings you book and the number of unexpected cancellations. How can you get a better handle on and even out this income stream? First, take a look at the fees you collected over the past year (noticing the ups and downs by month) and come up with a monthly average. If you earned $60,000 this year, your monthly average is $5,000 in planning fees per month. If you earned $120,000 this year, your average is $10,000 per month. Next, open a savings account that will serve as your “cushion” fund. This account is where your extra earnings will be deposited, and where you’ll draw from when needed. On months when you make more than your monthly average, save the excess in this account. On other months, when you don’t make quite as much as your monthly average, draw from this account to meet that number. This practice allows you to predict a more level income stream, which is important to plan for investments in your business and other business expenses throughout the year.Manage Expenses to Have Money at the End of the MonthTo be profitable, money coming into your business must be more than the money you are paying out. It’s that simple. With a more predictable income stream, it will be easier for you to make decisions regarding business expenses in the upcoming year. First, as you did with your income, take a look at your yearly expenses and determine which of these will be necessary next year. You’ll have fixed monthly expenses like rent, memberships, and subscriptions, as well as variable expenses like meals, client meetings, etc. Next, compare these expenses to your monthly income average. If you’re spending more than you’re bringing in, determine if there are expenses you can eliminate, or if you should increase the number of weddings you book to make the income average higher. Remember, the goal of your business is to have money at the end of the month, not month at the end of your money.Create a Budget RoadmapThe two steps above give you enough information to generate a simple budget based on last year’s numbers that better prepares you for 2013. If you expect to increase or decrease the number of weddings you book next year, adjust the income and expenses accordingly. Below is a sample budget for a wedding planner with a $5,000 monthly income average:There you have it, your road map for 2013. So, what now? Well this budget is your best guess at how the upcoming year could look based on some assumptions you’ve made. Things are going to change, and the most important part of budgeting for a business owner is reviewing this budget each month and adjusting for what really happens. Business owners use tools like QuickBooks, Mint, or create Excel spreadsheets to track their budget progress. Whatever your preference, even if it’s a spiral notebook, the important thing is to plan ahead, track progress against your plan, and adjust if necessary.Partner With Your CPA to Make Taxes ManageableOne of the biggest hurdles that a business owner can face is their tax bill at the end of the year. There are many advantages to owning your own business when it comes to filing your taxes. Working with a qualified CPA is recommended.A few tips to keep in mind as you collect your planning fees:•    Set aside money each month to pay your taxes. In a business where taxes are not automatically deducted from your income, it’s easy to forget to save for your tax bill.•    Work with your CPA to schedule your tax bill quarterly instead of yearly. Meeting with your CPA every three months can help you decide how much to pay toward your taxes based on the income that you’re generating throughout the year. This eliminates a huge bill at year’s end.•    Work with your CPA to Identify business expenses and other opportunities to reduce your taxable income. The smaller your taxable income, the less tax you pay as a result.Plan for the FutureAs you grow your business, it’s important to keep an eye on the future. Planning for certain risks, like becoming too sick or injured to work, could mean the difference between success and failure should you become unable to plan weddings and earn income. Similarly, planning for retirement becomes important as you realize you can’t plan weddings forever. These concerns can be addressed during your working years while providing an immediate tax benefit to your business today. If you haven’t met with a financial advisor, make it a point to find one this year as you plan for 2013. Discuss your options and create a plan for you and your 
business’ future.