Create a business budget

Here are the actions to take to create a business budget.
  1. 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.
  2. 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.
  3. 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.
  4. 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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