A small business budget looks at the income and the expenses of your business over a certain period of time. You may want to create a small business budget on an annual basis, but other companies decide to create them on a six monthly or even a three monthly basis depending on their specific needs – so how often you choose to create and evaluate your budget is entirely up to you and the needs of your business.
What will the budget include?
The budget will include anything from cash flow, to expenses, rent, wages, and revenue. It will look at your sales and any assets that you may have.
Creating your business budget
You may want to work as a team when creating your business budget. Handpicking the members of your staff to implement some ideas into various sections of your business budget may help you to create a better plan overall.
When you are creating your business budget, you should refer to previous budgets. You may want to use the template or the line of thought that you previously used in order to help you with the next one. At the end of each business plan you should have a forecast for the future, so the start of your next business plan should address this directly. Look at your specific aims and objectives and decide whether you met them or not, and to what degree.
Keep it simple
You should try to keep your business plan simple. A business plan should be an interactive and referable tool that you used throughout your business every day at work. It should not collect dust on the shelf and for this reason you should keep things simple and avoid any complexities or an overload of information.
Research, research, research
Do not pull your figures from the air because this is simply not realistic. You need to spend time looking at your industry and find out about your business sector overall.
Aim high but be realistic
Teamed with the above idea is the fact that you should aim high for your next business period, but you need to be pragmatic at the same time. You may want to look at areas of your business finances to improve if you overspend on your overheads, or you may be considering getting a business loan in order to invest in vital business activities. These are all achievable but they need to be measurable and realistic options for the year ahead, and they need to be right for your business.