Create a business budget
Here are the actions to take to create a business budget.
- Review your income and expenses. Study past records, such as statements and tax returns. Then list all of your expected expenses for 3-6 months, or the entire year if your business is seasonal.
- Divide expenses into categories such as debt, employees, and overhead. Look for spending patterns in each category. Also, remember to save money for emergencies or economic downturns.
- Project income and expenses for a future period based on past figures and trends, and any changes that you foresee. Regularly review your projections and adjust them if conditions change.
- Be disciplined; stick to your plan. Share your budget with advisors and your accountant to get their support. Be aware that sharing sales or salary projections with staff will create expectations.
Note: Studying your finances and objectives for the year, then creating and following an annual budget will help you make better-informed decisions to achieve your business goals.
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