Small business budgeting is a requirement when you’re an entrepreneur.
From networking with new clients to marketing costs to developing a website to building your brand, there are key components to starting a business, and they all cost money.
Small business budgeting is imperative in order to maintain a bountiful, well-established company, and it’s not as hard to keep your financials in check as one may think!
What is a business budget?
A business budget is a blueprint of your business’s finances. It details expenditures, income, goals, sales, and the current state of your company’s finances.
How to Begin Small Business Budgeting
- Add up ALL of your income. Add up the net income from all of your sales, freelance projects, courses, affiliate sales, and any other sources of income you can think of.
- Tally your FIXED costs. Your fixed costs are charges that always stay the same: rent, payroll costs, website hosting and maintenance, phone bills, certain utilities, monthly membership dues, etc.
- Determine your VARIABLE costs. These are your charges that vary month-to-month such as electricity and gas, shipping costs, Paypal or credit card fees, travel costs, etc.
- Estimate ONE-OFF payments. One-off payments may include one-time business or licensing courses, yearly membership dues, convention tickets, phone or computer repairs, building upkeep, car tune ups, etc. Make sure to account for these costs in your budget regardless if you have any plans in the works. That way, you’re covered if something comes up.
- Add them all together! Once you have an idea of your total financials, you can pull them all together using this simple formula: Total Income – Total Expenses = Total Net Income
From there, you can make sound decisions on your tax account savings, marketing and website budget, and more.
Now you should have a clear idea of how small business budgeting works, so you can use this simple process to keep yourself and your business on track!
Need help getting started on your small business budgeting? We can help! Schedule your call today!