Ever gotten that gut wrenching fear in the pit of your belly when you thought of making a budget? Then chances are you've never looked up the word in a good dictionary and learned all about the correct definition, and figured out how you can use that to your financial advantage.

Want some really good News? Running your business on a budget does not mean reducing the quality of the things you buy or denying your company anything it needs to operate. What it does mean, is that you have to figure out how to make enough income to afford the things your business has to have and to keep your spending within the limits of your income.

There's more good news! The most valuable asset you have is your staff and yourself, and your income earning potential. If you want more money to spend, then work out ways you and your employees can increase production to bring in more income.

A second definition you need know is this: a BUDGET is the sum total of the income needed for the company to operate, and to reach its financial goals.

Let's look at the first part of the definition; how much is needed for you and your company to function. Look at your Profit & Loss Statement to find out how much you spent and add the amount you are carrying on credit cards plus interest. Divide the total by 52 weeks, and multiply it by 1.036. The result is what your weekly budget is. That is the amount of money your company has to generate just to operate plus barely keep up with increases in the cost of doing business. That doesn't include paying compund interest on revolving credit debt.

More than likely, you have financial goals you also want the business to reach; That's the second part of the definition. Attaining those goals must get added to your budget as well.

Here is an example: a business owner wants to buy a new piece of equipment 6 months from now that costs $4,000. They divide the cost of the equipment by the 26 weeks they have before the target purchase date and learn they have to set aside $153.85 every week to have the cash for the equipment. This gets added to the budget, meaning the additional amount of income they have to put into the bank every week.

Most importantly, if you, the company owner, want to reach the goal of financial independence - working because you WANT TO instead of because you HAVE TO -- then the most critical part of the budget needs to be the wealth building cash you set aside in an investment plan and never touch.

Figure out how much money you would have to have in savings to live without working. Divide that dollar amount by the number of weeks until the time you would like to be financially independent. Figure out how to make that much more money each week, and you are truly on the right budget track to gaining financial independence.

How badly do you want to be a millionaire in 20 years? Figure out a way to increase the company's income enough to put away $961.54 a week in savings for the next 1,040 weeks and you will be a millionaire! The additional interest earnings on top of that will be a huge additional bonus that more than keeps up with the rise in the cost of living every year.

In this day and age of computers this task of budgeting is made so much easier by streamlined and automated Money Management Software, such as shown in this video.. This software operates as a companion to your accounting software for really easy day-to-day operation.