In 2021, 54% of small businesses created budget plans, and most of them expected great profits.
A business budget plan outlines most things a business needs to know about its finances. When making one, you’ll have more control over the way your business earns and spends money, which can provide a plethora of benefits.
While nearly half of small businesses operate without them, business budgeting plans are easy to make. To help you, we’ll go over everything you need to know in this small business budgeting guide.
Read on to learn how to budget money for a small business!
Outline Your Sources of Income
To start forming your business budget plan, you must first outline all of your sources of income. Doing this will give you a better understanding of how much you earn each quarter and from where.
When going over your income, you’ll want to write down the exact amounts, where they came from, and when you’ve received them. From there, it’ll be easier for you to figure out how much you can spend in the future, especially if you have a fixed income.
Consider Fixed and Variable Expenses
After outlining your sources of income, the next thing you must do is consider fixed and variable expenses. Fixed expenses are those that don’t change whereas variable expenses can be different each time.
For example, if you work with someone like Dexterous Media Group to market your business, the amount you’ll pay can change depending on what you want. However, hiring a cleaning would involve paying the same amount each month for their services.
Add Everything Together
Learning how to budget money for a small business is as simple as keeping track of your income and expenses. The last step to go through when making business budgeting plans involves adding everything together.
Providing you’ve outlined your sources of income and considered expenses, you won’t have a problem determining how much is left for spending. Yet, before you start spending anything, you should decide whether you’ll set aside money for later.
The key to successful small business budgeting is to have enough for emergencies while also being able to afford various investments. Because of this, consider saving some money before you decide to invest in something.
Start Making Your Business Budget Plan Now
As you can see, coming up with a small business budget plan is a simple process if you go through the right steps. Now that you’ve read this article, you should start thinking about how you can improve your business soon after making a budget.
Keep in mind that you should always start by looking at your sources of income. From there, you can go through the other steps and you’ll have no problem figuring out how much your business can spend.
To get more business advice and read different topics, check out our other articles!