Pit & Quarry, June 2014
same and principals compensation is the same with additional withdrawals made from time to time Within the broad category of budgeting the owner of the small aggregates operation or business may also want to do some specialized budgeting for cash flow The cash budget is one of the primary tools used in order to plan for cash flow A cash budget is often developed on a month by month basis A good cash budget allows an operator to see short term financial needs and opportunities for the operation One month Budgets should include all expenses operators know of and can anticipate as well as when expenses must be paid the operation may have extra cash and may be able to save some money in a money market fund or take advantage of a bargain in the marketplace Another month the aggregates operation may have a shortfall and have to withdraw some money from savings or even apply for a short term bank loan to cover its needs Budget reviews As mentioned budgets should be reviewed regularly Aggregates producers and plant operators should review their budgets BUSINESS to determine if money is being spent as wisely as possible Certain costs may have been overestimated which can free up money to grow the business Larger operations can afford to establish yearly budgets because they have more financial flexibility But small quarry or plant operators are more vulnerable to volatile markets or unexpected costs So aggregate producers and other small business owners should review their budgets more frequently and make changes they feel are necessary Often the day to day pressures of keeping up with work make it difficult to find the time to properly deal with business related financial issues Still regardless of whether a producer or sand and gravel plant operator is just starting out or has been in business for several years taking the time to create a business plan and budget for the aggregate operation is essential It will really help in better understanding the operations finances and building for a more profitable future P Q Mark E Battersby is a freelance writer who has specialized in taxes and finance for the last 25 years www pitandquarry com June 2014 PIT QUARRY 41
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