How to Keep Impulse Spending From Sinking Your Business Budget

How to Keep Impulse Spending From Sinking Your Business BudgetFive out of six Americans admit to making impulse purchases, according to a poll. Women are especially prone to impulse shopping when suffering from depression, which can be a problem for women entrepreneurs. Female business owners only receive 2 percent of venture capital despite owning 38 percent of U.S. businesses, and the consequences of going over budget can be particularly devastating.

If you're trying to curb your business impulse spending habits, consider the following tips to help you only buy what your business needs:

Create a Business Plan With Financial Statements

One of the best ways to make sure you don't make unnecessary purchases is to use a business plan to guide your budget. A business plan should include projections for your company's finances three to five years into the future. This means you need to map out your revenue as well as your expenses. For your first year, you should create projections for each month or quarter. For succeeding years, you should use quarterly or annual projections.

You need to create three key financial statements for each year. These are your income statement (also known as a profit and loss statement), your balance sheet and your cash flow statement.

If you need help creating your business plan, SCORE provides templates you can follow.

Prioritize Your Expenses

Start prioritizing your expenses by dividing them into three categories: daily operations, growing your business and transforming your business.

Automate Your Expenses

One way to make sure you keep your priority expenses covered is by automating them. For instance, you can set up automatic payments for vendors to pay for your operating expenses. You can automate your expense management more easily by using an accounting software program like Sage 50c. This tool lets you automate expenses such as purchasing, shipping and payroll.

Following these three steps will help you plan your spending, prioritize your expenses and ensure you always keep your most important expenses covered. By following these guidelines, you can see how much is left for discretionary spending and be confident that it won't break your budget.