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Budgeting for 2024

Happy holidays! I hope you are all having a wonderful holiday season. The end of December is traditionally downtime for most businesses; a time for rest and relaxation, and for spending time with family. As you take this time to rest and reset, it is also a great time to start looking forward to 2024, to make sure that the upcoming year goes as smoothly as possible.

The first thing that you should do is to set a budget for 2024. Review your 2023 actual income statement – the income and the expenses, and try and figure out where you should go from there. Do you want to grow or to stay the same? You need a mathematical plan for how to achieve your goals – if you want to grow 50% next year, you only have 12 months to do so, and usually that kind of growth happens gradually. Plot out when you want that growth to happen. One thing that will really help with this is looking at your 2023 actual results and see if there is any seasonality to your sales and expenses, so that you can strategically plan for 2024.

Once you plan out your sales for the year, then plan for expenses. What do you want to purchase, and when? If you are planning to increase your sales, are you also planning to increase your workforce to match the demand? Are these new workers going to be employees or independent contractors? Figure out if expenses from 2023 are not serving you, such as various networking groups or computer subscriptions. You should consider cutting or not renewing those expenses, so that you can save that money or use the funds for something else.

There are a number of expenses that you should also check, as the prices may have changed going into 2024. Health insurance for employees is probably going to increase this year. If you have a 401k or other retirement benefits, the IRS recently released their numbers for 2024, so take a look at those and let your employees know about the revised benefits. Every year payroll has new limits for things like social security, so you may need to set payroll up again. Unemployment rates are also set on January 1st by state and by company, and you need to notify the payroll company, or else the unemployment insurance rates will not be correct for your company. The IRS and the various states often have new rules on what is deductible or not. Check with your tax advisor to see if you should plan anything different for 2024.

Remember, you should have a goal in mind for your business. That goal should be a hope, a stretch, what you dream for your business when everything goes right. Your budget is not that. Your budget is for plans that are realistic given the circumstances. It’s important to have both lofty goals and a practical budget to plan for your success in 2024!