A key financial rule in business is “you can’t spend money that isn’t there”. Doing so will put you in major debt or worse, bankruptcy. Thus, you will need to make sure that you always have enough funds to cover your costs, you regularly look for ways to reduce your costs, and you focus on activities that increase revenues.
To do this you need to create a budget, which allocates how much you plan to spend every month for the next twelve months, and balance that with how much you plan to earn. While this is always an exercise in best guesses and projections, you will benefit from basing your projections on sound and realistic assumptions.
You can do this just using a spreadsheet but there are also a number of online tools that you can use to help manage your numbers.
Regardless of which budgeting tools you use, make sure you are doing a few things consistently:
Review and update your budget regularly.
Whether this is monthly, quarterly, or weekly, it is important to regularly track your projected income and expenses against actuals so you can change your strategy if it’s not working, or invest more heavily into one that is. This also helps you learn what works or doesn’t work for achieving your financial goals.
Group your revenue and expenses to align with the way you run your business.
If you’re selling products, include a products line, and if you’re spending money on people/labor, make sure you are tracking this in detail as it will be one of your more significant expenses.
Use systems that "talk" to each other.
Use software that will integrate with your accounting system so you can have an accurate update of actuals (the accounts you track in your budget system should match the accounts you track in your accounting system).
Communicate your budget.
Make sure all band members are aware of the budget so they also can be responsible for sticking to it and for communicating when their spending will impact the overall budget.
Decide who is going to manage your books and keep track of financial transactions.
Managing expenses requires discipline. You will need to make decisions about your business rules and processes.
No business can escape taxes. Ensure that you have everything in place to manage and prepare for your tax payments.