budget of your business plan

The Best Free Business Budget Templates

Published: October 12, 2023

Business budgets are a source of truth for your income and expenses. That includes all the money you spend — from A/B testing your marketing campaigns to your monthly office rent.

While organizing the numbers may sound difficult, using a business budget template makes the process simple. Plus, there are thousands of business budget templates for you to choose from.

We’ll share seven budget templates that can help organize your finances. But first, you’ll learn about different types of business budgets and how to create one.

What is a Business Budget?

A business budget is a spending plan that estimates the revenue and expenses of a business for a period of time, typically monthly, quarterly, or yearly.

The business budget follows a set template, which you can fill in with estimated revenues, plus any recurring or expected business expenses.

For example, say your business is planning a website redesign. You'd need to break down the costs by category: software, content and design, testing, and more.

Having a clear breakdown will help you estimate how much each category will cost and compare it with the actual costs.

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Types of Budgets for a Business

Master budget, operating budget, cash budget, static budget, departmental budget, capital budget, labor budget, project budget.

Business budgets aren’t one size fits all. In fact, there are many different types of budgets that serve various purposes. Let’s dive into some commonly used budgets:

Think of a master budget as the superhero of budgets — it brings together all the individual budgets from different parts of your company into one big, consolidated plan. It covers everything from sales and production to marketing and finances.

It includes details like projected revenues, expenses, and profitability for each department or business unit. It also considers important financial aspects like cash flow, capital expenditures, and even creates a budgeted balance sheet to show the organization's financial position.

The master budget acts as a guide for decision-making, helps with strategic planning, and gives a clear picture of the overall financial health and performance of your company. It's like the master plan that ties everything together and helps the organization move in the right direction.

Your operating budget helps your company figure out how much money it expects to make and spend during a specific period, usually a year. It not only predicts the revenue your business will bring in, but also outlines expenses it will need to cover, like salaries, rent, bills, and other operational costs.

By comparing your actual expenses and revenue to the budgeted amounts, your company can see how it's performing and make adjustments if needed. It helps keep things in check, allowing your business to make wise financial decisions and stay on track with its goals.

Free Business Budget Templates

Manage your business, personal, and program spend on an annual, quarterly, and monthly basis.

• Personal Budget Template
• Annual Budget Template
• Program Budget Template

You're all set!

Click this link to access this resource at any time.

A cash budget estimates the cash inflows and outflows of your business over a specific period, typically a month, quarter, or year. It provides a detailed projection of cash sources and uses, including revenue, expenses, and financing activities.

The cash budget helps you effectively manage your cash flow, plan for cash shortages or surpluses, evaluate the need for external financing, and make informed decisions about resource allocation.

By utilizing a cash budget, your business can ensure it has enough cash on hand to meet its financial obligations, navigate fluctuations, and seize growth opportunities.

A static budget is a financial plan that remains unchanged, regardless of actual sales or production volumes.

It’s typically created at the beginning of a budget period and doesn’t account for any fluctuations or changes in business conditions. It also assumes that all variables, such as sales, expenses, and production levels, will remain the same throughout the budget period.

While a static budget provides a baseline for comparison, it may not be realistic for businesses with fluctuating sales volumes or variable expenses.

A departmental budget focuses on the financial aspects of a specific department within your company, such as sales, marketing or human resources.

When creating a departmental budget, you may look at revenue sources like departmental sales, grants, and other sources of income. On the expense side, you consider costs such as salaries, supplies, equipment, and any other expenses unique to that department.

The goal of a departmental budget is to help the department manage its finances wisely. It acts as a guide for making decisions and allocating resources effectively. By comparing the actual numbers to the budgeted amounts, department heads can see if they're on track or if adjustments need to be made.

A capital budget is all about planning for big investments in the long term. It focuses on deciding where to spend money on things like upgrading equipment, maintaining facilities, developing new products, and hiring new employees.

The budget looks at the costs of buying new stuff, upgrading existing things, and even considers depreciation, which is when something loses value over time. It also considers the return on investment, like how much money these investments might bring in or how they could save costs in the future.

The budget also looks at different ways to finance these investments, whether it's through loans, leases, or other options. It's all about making smart decisions for the future, evaluating cash flow, and choosing investments that will help the company grow and succeed.

A labor budget helps you plan and manage the costs related to your employees. It involves figuring out how much your business will spend on wages, salaries, benefits, and other labor-related expenses.

To create a labor budget, you'll need to consider factors like how much work needs to be done, how many folks you'll need to get it done, and how much it'll all cost. This can help your business forecast and control labor-related expenses and ensure adequate staffing levels.

By having a labor budget in place, your business can monitor and analyze your labor costs to make informed decisions and optimize your resources effectively.

A project budget is the financial plan for a specific project.

Let's say you have an exciting new project you want to tackle. A project budget helps you figure out how much money you'll need and how it will be allocated. It covers everything from personnel to equipment and materials — basically, anything you'll need to make the project happen.

By creating a project budget, you can make sure the project is doable from a financial standpoint. It helps you keep track of how much you planned to spend versus how much you actually spend as you go along. That way, you have a clear idea of whether you're staying on track or if there are any financial challenges that need attention.

How to Create a Business Budget

While creating a business budget can be straightforward, the process may be more complex for larger companies with multiple revenue streams and expenses.

No matter the size of your business, here are the basic steps to creating a business budget.

1. Gather financial data.

Before you create a business budget, it’s important to gather insights from your past financial data. By looking at things like income statements, expense reports, and sales data, you can spot trends, learn from past experiences, and see where you can make improvements.

Going through your financial history helps you paint a true picture of your income and expenses. So, when you start creating your budget, you can set achievable targets and make sure your estimates match what's actually been happening in your business.

2. Find a template, or make a spreadsheet.

There are many free or paid budget templates online. You can start with an already existing budget template. We list a few helpful templates below.

You may also opt to make a spreadsheet with custom rows and columns based on your business.

3. Fill in revenues.

Once you have your template, start by listing all the sources of your business’ income. With a budget, you’re planning for the future, so you’ll also need to forecast revenue streams based on previous months or years. For a new small business budget, you’ll rely on your market research to estimate early revenue for your company.

When you estimate your revenue , you're essentially figuring out how much money you have to work with. This helps you decide where to allocate your resources and which expenses you can fund.

4. Subtract fixed costs for the time period.

Fixed costs are the recurring costs you have during each month, quarter, or year. Examples include insurance, rent for office space, website hosting, and internet.

The key thing to remember about fixed costs is that they stay relatively stable, regardless of changes in business activity. Even if your sales decrease or production slows down, these costs remain the same.

However, it's important to note that fixed costs can still change over the long term, such as when renegotiating lease agreements or adjusting employee salaries.

5. Consider variable costs.

Variable costs will change from time to time. Unlike fixed costs, variable costs increase or decrease as the level of production or sales changes.

Examples include raw materials needed to manufacture your products, packaging and shipping costs, utility bills, advertising costs, office supplies, and new software or technology.

You may always need to pay some variable costs, like utility bills. However, you can shift how much you spend toward other expenses, like advertising costs, when you have a lower-than-average estimated income.

6. Set aside time for business budget planning.

Unexpected expenses might come up, or you might want to save to expand your business. Either way, review your budget after including all expenses, fixed costs, and variable costs. Once completed, you can determine how much money you can save. It’s wise to create multiple savings accounts. One should be used for emergencies. The other holds money that can be spent on the business to drive growth.

Fill out the form to get the free templates.

How to manage a business budget.

There are a few key components to managing a healthy business budget.

Budget Preparation

The process all starts with properly preparing and planning the budget at the beginning of each month, quarter, or year. You can also create multiple budgets, some short-term and some long-term. During this stage, you will also set spending limits and create a system to regularly monitor the budget.

Budget Monitoring

In larger businesses, you might delegate budget tracking to multiple supervisors. But even if you’re a one-person show, keep a close eye on your budget. That means setting a time in your schedule each day or week to review the budget and track actual income and expenses. Be sure to compare the actual numbers to the estimates.

Budget Forecasting

With regular budget tracking, you always know how your business is doing. Check in regularly to determine how you are doing in terms of revenue and where you have losses. Find where you can minimize expenses and how you can move more money into savings.

Why is a Budget Important for a Business?

A budget is crucial for businesses. Without one, you could easily be drowning in expenses or unexpected costs.

The business budget helps with several operations. You can use a business budget to keep track of your finances, save money to help you grow the business or pay bonuses in the future, and prepare for unexpected expenses or emergencies.

You can also review your budget to determine when to take the next leap for your business. For example, you might be dreaming of a larger office building or the latest software, but you want to make sure you have a healthy net revenue before you make the purchase.

Best Free Business Budget Templates

1. marketing budget template.

Knowing how to manage a marketing budget can be a challenge, but with helpful free templates like this marketing budget template bundle , you can track everything from advertising expenses to events and more.

This free bundle includes eight different templates, so you can create multiple budgets to help you determine how much money to put toward marketing, plus the return on your investment.

2. Small Business Budget Template

For small businesses, it can be hard to find the time to draw up a budget, but it’s crucial to help keep the business in good health.

Capterra offers a budget template specifically for small businesses. Plus, this template works with Excel. Start by inputting projections for the year. Then, the spreadsheet will project the month-to-month budget. You can input your actual revenue and expenses to compare, making profits and losses easy to spot.

3. Startup Budget Template

What if you don’t have any previous numbers to rely on to create profit and expense estimates? If you are a startup, this Gusto budget template will help you draw up a budget before your business is officially in the market. This will help you track all the expenses you need to get your business up and running, estimate your first revenues, and determine where to pinch pennies.

4. Free Business Budget Template

You might be familiar with Intuit. Many companies, big and small, rely on Intuit’s services like Quickbooks and TurboTax. Even if you don’t use the company’s paid financial services, you can take advantage of Intuit’s free budget template , which works in Google Sheets or Excel.

It features multiple spreadsheet tabs and simple instructions. You enter your revenue in one specific tab and expenses in another. You can also add additional tabs as needed. Then, like magic, the spreadsheet uses the data in the income and expense tabs to summarize the information. This template can even determine net savings and the ending balance.

5. Department Budget Sheet

A mid- to large-size company will have multiple departments, all with different budgetary needs. These budgets will all be consolidated into a massive, company-wide budget sheet. Having a specific template for each department can help teams keep track of spending and plan for growth.

This free template from Template.net works in either document or spreadsheet formats. This budget template can help different departments keep track of their income and spending.

6. Project Budget Template

Every new project comes with expenses. This free budget template from Monday will help your team estimate costs before undertaking a project. You can easily spot if you're going over budget midway through a project so you can adjust.

This template is especially useful for small companies that are reporting budgets to clients and for in-house teams getting buy-in for complex projects.

7. Company Budget Template

Want to keep track of every penny? Use this template from TemplateLab to draw up a detailed budget. The list of expenses includes fixed costs, employee costs, and variable costs. This business template can be especially useful for small businesses that want to keep track of expenses in one, comprehensive document.

Create a Business Budget to Help Your Company Grow

Making your first business budget can be daunting, especially if you have several revenue streams and expenses. Using a budget template can make getting started easy. And, once you get it set up, these templates are simple to replicate.

With little planning and regular monitoring, you can plan for the future of your business.

Editor's note: This post was originally published in September 2021 and has been updated for comprehensiveness.

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The Best Free Business Budget Worksheets

6 templates to manage your business, personal, and program spend on an annual, quarterly, and monthly basis.

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How to Write a Business Plan, Step by Step

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

What is a business plan?

1. write an executive summary, 2. describe your company, 3. state your business goals, 4. describe your products and services, 5. do your market research, 6. outline your marketing and sales plan, 7. perform a business financial analysis, 8. make financial projections, 9. summarize how your company operates, 10. add any additional information to an appendix, business plan tips and resources.

A business plan outlines your business’s financial goals and explains how you’ll achieve them over the next three to five years. Here’s a step-by-step guide to writing a business plan that will offer a strong, detailed road map for your business.

ZenBusiness

A business plan is a document that explains what your business does, how it makes money and who its customers are. Internally, writing a business plan should help you clarify your vision and organize your operations. Externally, you can share it with potential lenders and investors to show them you’re on the right track.

Business plans are living documents; it’s OK for them to change over time. Startups may update their business plans often as they figure out who their customers are and what products and services fit them best. Mature companies might only revisit their business plan every few years. Regardless of your business’s age, brush up this document before you apply for a business loan .

» Need help writing? Learn about the best business plan software .

This is your elevator pitch. It should include a mission statement, a brief description of the products or services your business offers and a broad summary of your financial growth plans.

Though the executive summary is the first thing your investors will read, it can be easier to write it last. That way, you can highlight information you’ve identified while writing other sections that go into more detail.

» MORE: How to write an executive summary in 6 steps

Next up is your company description. This should contain basic information like:

Your business’s registered name.

Address of your business location .

Names of key people in the business. Make sure to highlight unique skills or technical expertise among members of your team.

Your company description should also define your business structure — such as a sole proprietorship, partnership or corporation — and include the percent ownership that each owner has and the extent of each owner’s involvement in the company.

Lastly, write a little about the history of your company and the nature of your business now. This prepares the reader to learn about your goals in the next section.

» MORE: How to write a company overview for a business plan

The third part of a business plan is an objective statement. This section spells out what you’d like to accomplish, both in the near term and over the coming years.

If you’re looking for a business loan or outside investment, you can use this section to explain how the financing will help your business grow and how you plan to achieve those growth targets. The key is to provide a clear explanation of the opportunity your business presents to the lender.

For example, if your business is launching a second product line, you might explain how the loan will help your company launch that new product and how much you think sales will increase over the next three years as a result.

» MORE: How to write a successful business plan for a loan

In this section, go into detail about the products or services you offer or plan to offer.

You should include the following:

An explanation of how your product or service works.

The pricing model for your product or service.

The typical customers you serve.

Your supply chain and order fulfillment strategy.

You can also discuss current or pending trademarks and patents associated with your product or service.

Lenders and investors will want to know what sets your product apart from your competition. In your market analysis section , explain who your competitors are. Discuss what they do well, and point out what you can do better. If you’re serving a different or underserved market, explain that.

Here, you can address how you plan to persuade customers to buy your products or services, or how you will develop customer loyalty that will lead to repeat business.

Include details about your sales and distribution strategies, including the costs involved in selling each product .

» MORE: R e a d our complete guide to small business marketing

If you’re a startup, you may not have much information on your business financials yet. However, if you’re an existing business, you’ll want to include income or profit-and-loss statements, a balance sheet that lists your assets and debts, and a cash flow statement that shows how cash comes into and goes out of the company.

Accounting software may be able to generate these reports for you. It may also help you calculate metrics such as:

Net profit margin: the percentage of revenue you keep as net income.

Current ratio: the measurement of your liquidity and ability to repay debts.

Accounts receivable turnover ratio: a measurement of how frequently you collect on receivables per year.

This is a great place to include charts and graphs that make it easy for those reading your plan to understand the financial health of your business.

This is a critical part of your business plan if you’re seeking financing or investors. It outlines how your business will generate enough profit to repay the loan or how you will earn a decent return for investors.

Here, you’ll provide your business’s monthly or quarterly sales, expenses and profit estimates over at least a three-year period — with the future numbers assuming you’ve obtained a new loan.

Accuracy is key, so carefully analyze your past financial statements before giving projections. Your goals may be aggressive, but they should also be realistic.

NerdWallet’s picks for setting up your business finances:

The best business checking accounts .

The best business credit cards .

The best accounting software .

Before the end of your business plan, summarize how your business is structured and outline each team’s responsibilities. This will help your readers understand who performs each of the functions you’ve described above — making and selling your products or services — and how much each of those functions cost.

If any of your employees have exceptional skills, you may want to include their resumes to help explain the competitive advantage they give you.

Finally, attach any supporting information or additional materials that you couldn’t fit in elsewhere. That might include:

Licenses and permits.

Equipment leases.

Bank statements.

Details of your personal and business credit history, if you’re seeking financing.

If the appendix is long, you may want to consider adding a table of contents at the beginning of this section.

How much do you need?

with Fundera by NerdWallet

We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

Here are some tips to write a detailed, convincing business plan:

Avoid over-optimism: If you’re applying for a business bank loan or professional investment, someone will be reading your business plan closely. Providing unreasonable sales estimates can hurt your chances of approval.

Proofread: Spelling, punctuation and grammatical errors can jump off the page and turn off lenders and prospective investors. If writing and editing aren't your strong suit, you may want to hire a professional business plan writer, copy editor or proofreader.

Use free resources: SCORE is a nonprofit association that offers a large network of volunteer business mentors and experts who can help you write or edit your business plan. The U.S. Small Business Administration’s Small Business Development Centers , which provide free business consulting and help with business plan development, can also be a resource.

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A How-To Guide for Creating a Business Budget

Amanda Smith

Reviewed by

September 23, 2022

This article is Tax Professional approved

Most business owners know how important a business budget is when it comes to managing expenses and planning for the future—but in a challenging economic environment like the one we’ve been experiencing, your business budget takes on even greater significance.

With inflation running rampant and the possibility of a recession looming, business owners need to be able to forecast their cash flow, manage their expenses, and plan for the future. Creating a detailed business budget is the first step.

Whether you want to revamp your budgeting method, or you’ve never created a business budget before, this guide will walk you through the process.

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What is a business budget?

A budget is a detailed plan that outlines where you’ll spend your money monthly or annually.

You give every dollar a “job,” based on what you think is the best use of your business funds, and then go back and compare your plan with reality to see how you did.

A budget will help you:

• Forecast what money you expect to earn
• Plan where to spend that revenue
• See the difference between your plan and reality

What makes a good budget?

The best budgets are simple and flexible. If circumstances change (as they do), your budget can flex to give you a clear picture of where you stand at all times.

Every good budget should include seven components:

1. Your estimated revenue

This is the amount you expect to make from the sale of goods or services. It’s all of the cash you bring in the door, regardless of what you spent to get there. This is the first line on your budget. It can be based on last year’s numbers or (if you’re a startup ), based on industry averages.

2. Your fixed costs

These are all your regular, consistent costs that don’t change according to how much you make—things like rent, insurance, utilities, bank fees, accounting and legal services, and equipment leasing.

Further reading: Fixed Costs (Everything You Need to Know)

3. Your variable costs

These change according to production or sales volume and are closely related to “ costs of goods sold ,” i.e., anything related to the production or purchase of the product your business sells. Variable costs might include raw materials, inventory, production costs, packaging, or shipping. Other variable costs can include sales commission, credit card fees, and travel. A clear budget plan outlines what you expect to spend on all these costs.

The cost of salaries can fall under both fixed and variable costs. For example, your core in-house team is usually associated with fixed costs, while production or manufacturing teams—anything related to the production of goods—are treated as variable costs. Make sure you file your different salary costs in the correct area of your budget.

Further reading: Variable Costs (A Simple Guide)

4. Your one-off costs

One-off costs fall outside the usual work your business does. These are startup costs like moving offices, equipment, furniture, and software, as well as other costs related to launch and research.

5. Your cash flow

Cash flow is all money traveling into and out of a business. You have positive cash flow if there is more money coming into your business over a set period of time than going out. This is most easily calculated by subtracting the amount of money available at the beginning of a set period of time and at the end.

Since cash flow is the oxygen of every business, make sure you monitor this weekly, or at least monthly. You could be raking it in and still not have enough money on hand to pay your suppliers.

6. Your profit

Profit is what you take home after deducting your expenses from your revenue. Growing profits mean a growing business. Here you’ll plan out how much profit you plan to make based on your projected revenue, expenses, and cost of goods sold. If the difference between revenue and expenses (aka “ profit margins ”) aren’t where you’d like them to be, you need to rethink your cost of goods sold and consider raising prices .

Or, if you think you can’t squeeze any more profit margin out of your business, consider boosting the Advertising and Promotions line in your budget to increase total sales.

7. A budget calculator

A budget calculator can help you see exactly where you stand when it comes to your business budget planning. It might sound obvious, but getting all the numbers in your budget in one easy-to-read summary is really helpful.

In your spreadsheet, create a summary page with a row for each of the budget categories above. This is the framework of your basic budget. Then, next to each category, list the total amount you’ve budgeted. Finally, create another column to the right—when the time period ends, use it to record the actual amounts spent in each category. This gives you a snapshot of your budget that’s easy to find without diving into layers of crowded spreadsheets.

See the sample below.

Pro tip: link the totals on the summary page to the original sums in your other budget tabs . That way when you update any figures, your budget summary gets updated at the same time. The result: your very own budget calculator.

You can also check out this simple Startup Cost Calculator from CardConnect. It lays out some of the most common expenses that you might not have considered. From there, you can customize a rough budget for your own industry.

Small business budgets for different types of company

While every good budget has the same framework, you’ll need to think about the unique budgeting quirks of your industry and business type.

Seasonal businesses

If your business has a busy season and a slow season, budgeting is doubly important.

Because your business isn’t consistent each month, a budget gives you a good view of past and present data to predict future cash flow . Forecasting in this way helps you spot annual trends, see how much money you need to get you through the slow months, and look for opportunities to cut costs to offset the low season. You can use your slow season to plan for the next year, negotiate with vendors, and build customer loyalty through engagement.

Don’t assume the same thing will happen every year, though. Just like any budget, forecasting is a process that evolves. So start with what you know, and if you don’t know something—like what kind of unexpected costs might pop up next quarter— just give it your best guess . Better to set aside money for an emergency that doesn’t happen than to be blindsided.

Ecommerce businesses

The main budgeting factor for ecommerce is shipping. Shipping costs (and potential import duties) can have a huge impact.

Do you have space in your budget to cover shipping to customers? If not, do you have an alternative strategy that’s in line with your budget—like flat rate shipping or real-time shipping quotes for customers? Packaging can affect shipping rates, so factor that into your cost of goods sold too. While you’re at it, consider any international warehousing costs and duties.

You’ll also want to create the best online shopping experience for your customers, so make sure you include a good web hosting service, web design, product photography, advertising, blogging, and social media in your budget.

Inventory businesses

If you need to stock up on inventory to meet demand, factor this into your cost of goods sold. Use the previous year’s sales or industry benchmarks to take a best guess at the amount of inventory you need. A little upfront research will help ensure you’re getting the best prices from your vendors and shipping the right amount to satisfy need, mitigate shipping costs, and fit within your budget.

The volume of inventory might affect your pricing. For example, if you order more stock, your cost per unit will be lower, but your overall spend will be higher. Make sure this is factored into your budget and pricing, and that the volume ordered isn’t greater than actual product demand.

You may also need to include the cost of storage solutions or disposal of leftover stock.

Custom order businesses

When creating custom ordered goods, factor in labor time and cost of operations and materials. These vary from order to order, so make an average estimate.

Budgeting is tricky for startups—you rarely have an existing model to use. Do your due diligence by researching industry benchmarks for salaries, rent, and marketing costs. Ask your network what you can expect to pay for professional fees, benefits, and equipment. Set aside a portion of your budget for advisors—accountants, lawyers, that kind of thing. A few thousand dollars upfront could save you thousands more in legal fees and inefficiencies later on.

This is just scratching the surface, and there’s plenty more to consider when creating a budget for a startup. This business startup budget guide from The Balance is a great start.

Service businesses

If you don’t have a physical product, focus on projected sales, revenue, salaries, and consultant costs. Figures in these industries—whether accounting, legal services, creative, or insurance—can vary greatly, which means budgets need flexibility. These figures are reliant on the number of people required to provide the service, the cost of their time, and fluctuating customer demand.

Small business budgeting templates

A business budget template can be as simple as a table or as complex as a multi-page spreadsheet. Just make sure you’re creating something that you’ll actually use.

Create your budget yearly—a 12-month budget is standard fare—with quarterly or monthly updates and check-ins to ensure you’re on track.

Here are some of our favorite templates for you to plug into and get rolling.

• The Balance has a clear table template that lists every budget item, the budgeted amount, the actual amount, and the difference between the two. Use this one if you’re looking to keep it simple.
• Capterra has both monthly and annual breakdowns in their Excel download. It’s straightforward, thorough, and fairly foolproof.
• Google Sheets has plenty of budget templates hiding right under your nose. They’re easy to use, and they translate your figures into clear tables and charts on a concise, visual summary page.
• Smartsheet has multiple resources for small businesses, including 12-month budget spreadsheets, department budget templates, projection templates, project-by-project templates, and startup templates. These templates are ideal if you’re looking for a little more detail.
• Scott’s Marketplace is a blog for small businesses. Their budget template comes with step-by-step instructions that make it dead simple for anyone.
• Vertex42 focuses on Excel spreadsheets and offers templates for both product-based and service-based businesses, as well as a business startup costs template for anyone launching a new business.

Budgeting + bookkeeping = a match made in heaven

Making a budget is kind of like dreaming: it’s mostly pretend. But when you can start pulling on accurate historical financials to plan the upcoming year, and when you can check your budget against real numbers, that’s when budgets start to become useful.

The only way to get accurate financial data is through consistent bookkeeping.

Don’t have a regular bookkeeping process down pat? Check out our free guide, Bookkeeping Basics for Entrepreneurs . We’ll walk you through everything you need to know to get going yourself, for free.

If you need a bit more help, get in touch with us. Bookkeeping isn’t for everyone, especially when you’re also trying to stay on top of a growing business—but at Bench, bookkeeping is what we do best.

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Step-by-Step Guide to Creating a Business Budget Plan

A well-structured business budget plan is crucial for success. It serves as a financial stability and growth roadmap, allowing companies to allocate resources wisely and make informed decisions. Understanding the basics of business budgeting is essential for any entrepreneur or business owner looking to create a solid financial plan to help them achieve their goals.

The Importance of Business Budget Planning

Business budget planning is not just about crunching numbers; it's about setting clear financial goals and outlining strategies to achieve them. It provides a framework for managing expenses, maximizing revenue , and ensuring the long-term sustainability of a company. Without a well-thought-out budget plan, businesses may struggle to stay afloat in today's competitive market.

Understanding the Basics of Business Budget

At its core, a business budget is an estimate of future income and expenses based on historical data and current trends. It involves identifying all sources of revenue and categorizing various types of expenses, including fixed costs (rent, salaries) and variable costs (utilities, marketing). Understanding these fundamental concepts is essential for creating an effective budget plan.

Benefits of Creating a Business Budget Plan

The benefits of creating a business budget plan are manifold. It clarifies where money is being spent and helps identify areas where costs can be reduced or investments can be made to drive growth. Additionally, having a well-structured budget plan can instill confidence in stakeholders, such as investors or lenders who want to see evidence of sound financial management .

Now that we've laid the groundwork for understanding the importance of business budget planning and its basics, let's delve deeper into the process by assessing your financial situation and setting achievable goals.

Assessing Your Financial Situation

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Now that you understand the importance of business budget planning, it's time to assess your financial situation. This involves analyzing your current revenue and expenses, identifying fixed and variable costs, and projecting future income and expenses.

Analyzing Current Revenue and Expenses

You must clearly understand your current revenue and expenses to create a business budget plan that works for your company . This involves looking at your sales figures, incoming cash flow, and all the money going out of your business. By analyzing these numbers, you can gain valuable insights into where your money is coming from and where it's going.

Identifying Fixed and Variable Costs

When creating a business budget plan, it's crucial to distinguish between fixed and variable costs. Fixed costs, such as rent or salaries, remain constant regardless of your level of production or sales. Variable costs, like raw materials or shipping expenses, fluctuate with production levels or sales volume. Identifying these costs will help you make more accurate financial projections.

Projecting Future Income and Expenses

Looking ahead is an essential part of business budget planning. You can anticipate potential financial challenges or opportunities by projecting future income and expenses based on historical data and market trends. This will enable you to make informed decisions about resource allocation and strategic investments.

Remember that creating a business budget plan is not just about crunching numbers; it's about setting the stage for sustainable growth and success in the long run.

Setting Financial Goals

Now that you understand the basics of business budget planning, it's time to set your financial goals . Establishing short-term and long-term objectives can create a roadmap for your business's financial success. Whether increasing revenue or reducing expenses, having clear goals will guide your budgeting decisions.

Establishing Short-term and Long-term Objectives

To effectively create a business budget plan, it's crucial to establish both short-term and long-term financial objectives. Short-term goals could include reducing overhead costs by a certain percentage within six months, while long-term goals might involve doubling your annual revenue within three years. These objectives provide direction for allocating funds and making strategic financial decisions.

Allocating Funds for Growth and Expansion

One of the key benefits of creating a business budget plan is the ability to allocate funds for growth and expansion. Whether you're looking to invest in new equipment, expand your product line, or open additional locations, setting aside funds in your budget allows you to pursue these opportunities without compromising your financial stability .

Planning for Contingencies and Emergencies

In business, unexpected events can have a significant impact on your finances. Planning for contingencies and emergencies is essential when creating a business budget plan. You can protect your business from potential financial hardships by setting aside a portion of your budget for unforeseen circumstances, such as economic downturns or equipment breakdowns.

Creating the Budget Plan

Now that you understand the importance of business budget planning, it's time to create a solid business budget plan. When choosing the right budgeting method, consider your company's size, industry, and financial goals. Whether it's zero- or activity-based budgeting, select a method that aligns with your business objectives and ensures accurate financial management .

Choosing the Right Budgeting Method

Selecting the right budgeting method is crucial for effective business budget planning. Zero-based budgeting involves justifying every expense from scratch, while activity-based budgeting focuses on cost allocation based on activities. Whichever method you choose, ensure it aligns with your company's financial objectives and provides a clear resource allocation roadmap.

Allocating Funds to Different Departments

When creating a business budget plan, allocating funds to different departments is essential based on their specific needs and priorities. Consider departmental goals, operational requirements, and revenue generation potential when distributing financial resources. This approach ensures each department has the necessary funds to function effectively within the business framework.

Monitoring and Adjusting the Budget as Needed

Once you've allocated funds to different departments in your business budget plan, monitoring and adjusting the budget as needed is essential. Regularly review your financial performance against the set targets and adjust based on changing market conditions or internal dynamics. Flexibility ensures that your business remains agile and responsive to evolving economic landscapes.

By carefully choosing the right budgeting method, allocating funds to different departments thoughtfully, and monitoring and adjusting the budget as needed, you can create a robust business budget plan that sets your company up for long-term success in managing its finances effectively.

Implementing the Budget Plan

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Now that you have created a solid business budget plan, it's time to implement it. This step involves communicating the budget to key stakeholders, training employees on budgetary guidelines, and integrating the budget into daily operations.

Communicating the Budget to Key Stakeholders

It is crucial to inform all relevant stakeholders about the business budget plan. This includes shareholders, managers, and other decision-makers who must know the financial goals and constraints. Clear communication will ensure everyone is on the same page and can work towards common objectives.

Training Employees on Budgetary Guidelines

Employees play a vital role in adhering to the budget plan. Providing them with comprehensive training on budgetary guidelines will help them understand their responsibilities in managing costs and staying within allocated funds. This will empower them to make informed decisions that align with the company's financial objectives.

Integrating the Budget into Daily Operations

Incorporating the business budget plan into daily operations requires a strategic approach. It involves aligning all activities with the financial goals outlined in the budget, ensuring that resources are utilized efficiently, and making adjustments as needed to stay within budgetary limits. This integration fosters a culture of financial responsibility throughout the organization.

By effectively implementing your business budget plan through clear communication, employee training, and seamless integration into daily operations, you can set your company up for financial success while achieving your long-term objectives.

Tracking and Evaluating Performance

Monitoring Budget Variance and Deviations

Once you have implemented your business budget plan, it's crucial to regularly monitor the budget variance and identify any deviations from the projected expenses and revenue. This will help you understand where adjustments need to be made and where you may exceed or fall short of your financial goals.

Conducting Regular Financial Reviews

Regular financial reviews are essential for evaluating the performance of your business budget plan. By conducting these reviews, you can assess whether your actual income and expenses align with what was projected in the budget. This will allow you to make informed decisions on where to allocate funds or where to cut back to stay on track with your financial objectives.

Making Informed Decisions Based on Budget Analysis

Analyzing the data from your business budget plan is key to making informed decisions for your company's future. By understanding how well your budget is performing, you can strategically plan for growth, expansion, and any potential contingencies or emergencies that may arise.

Continuously tracking and evaluating the performance of your business budget plan is vital for maintaining financial stability and achieving long-term success. By closely monitoring variance, conducting regular reviews, and making informed decisions based on budget analysis, you can ensure that your business stays on track toward its financial goals.

Tips for Successfully Implementing Your Business Budget Plan: Striking a Balance Between Dreams and Dollars

Every business owner knows the importance of a budget—it's the roadmap to financial stability and growth. But crafting a brilliant budget is only half the battle. The real test lies in implementation. How do you translate those meticulously planned numbers into tangible results? Here are some key tips to ensure your business budget plan becomes a reality, not just a document gathering dust on a shelf:

1. Set SMART Goals

Your budget shouldn't exist in a vacuum. It should be tightly woven into your business goals. But instead of vague aspirations, set SMART goals: Specific, Measurable, Achievable, Relevant, and Time-bound . This clarity provides a clear direction for allocating resources and tracking progress.

2. Foster Collaboration

Budgeting isn't a solo act. Involve key stakeholders in the process, from department heads to team members. This collaborative approach fosters buy-in, ensures everyone understands their role in achieving financial goals, and harnesses diverse perspectives for smarter decision-making.

3. Embrace Transparency

Open communication is crucial. Share the budget with relevant team members, not just financial experts. This transparency builds trust, empowers employees to make informed decisions, and encourages a culture of financial responsibility.

4. Track and Monitor

Don't let your budget become a static document. Regularly track actual spending against the planned figures. Identify any discrepancies, analyze the causes, and make adjustments as needed. This active monitoring allows you to course-correct before small deviations snowball into major issues.

5. Leverage Technology

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• Easy to use. Strikingly is a user-friendly platform that is easy to use, even for those without experience in website design .
• Affordable. Strikingly offers a variety of affordable plans to fit any budget.
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• SEO-friendly. Strikingly's websites are SEO-friendly so that you can improve your website's ranking in search results.

Strikingly is a valuable tool to help businesses create and manage their online presence . Strikingly's features can also be helpful for businesses when creating a business budget plan.

6. Review and Adapt

The business landscape is dynamic. Be prepared to adapt your budget as circumstances change. Regularly review your plan, considering market shifts, new opportunities, and unforeseen challenges. A flexible approach ensures your budget remains relevant and responsive to the ever-evolving environment.

7. Celebrate Successes

Don't forget to celebrate your wins! Recognizing positive financial milestones and acknowledging the collective effort motivates everyone and reinforces the importance of adhering to the budget plan.

8. Build a Culture of Accountability

Create a culture where all share financial responsibility. Hold yourself and your team accountable for staying within budget limits. This fosters a sense of ownership and promotes responsible financial behavior across the organization.

9. Communicate Effectively

Regularly communicate budget updates, performance metrics, and any necessary adjustments to the team. This transparency keeps everyone informed, engaged, and empowered to contribute to the business's financial success.

10. Continuously Improve

Never stop learning and evolving. Regularly evaluate your budgeting process, identify areas for improvement, and implement new strategies to optimize your financial management. Remember, a successful budget is a living document, constantly adapting and growing alongside your business.

By following these tips and embracing tools like Strikingly , you can transform your business budget plan from a theoretical framework into a powerful tool for driving growth and achieving your financial aspirations. Remember, successful budgeting is a journey, not a destination. It requires ongoing commitment, collaboration, and a continuous focus on improvement. So, embark on your financial journey confidently and watch your business reach new heights of success.

A well-structured business budget plan can lead to long-term financial stability and growth. It helps identify areas for cost savings, allocate funds for expansion, and plan for contingencies, ultimately leading to improved profitability and sustainability for your business.

Remember that creating a well-structured business budget plan is crucial for the success and sustainability of your business. By following these steps and incorporating these tips into your planning process, you can ensure that your business is on the path to financial success and growth.

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How to Create a Small Business Budget in 5 Simple Steps

Want to protect the financial health of your small business? You need a business budget. Here's how to create one.

When you build a business, there are a lot of things to stay on top of, from marketing and finding new  clients  to building a website and establishing your digital presence. But there’s one element that you want to stay on top of from the very beginning—and that’s your business budget.

Having a detailed and accurate budget is a must if you want to build a thriving, sustainable business. But how, exactly, do you create one? What are the steps for business budget planning?

As a small business owner, let’s take a look at how to create a business budget in five simple, straightforward steps.

What’s a Business Budget—and Why Is It Important?

Before we jump into creating a business budget, let’s quickly cover what a business budget is—and why it’s so important for small businesses.

A business budget is an overview of your business funds. It outlines key information on both the current state of your finances (including income and expenses) and your long-term financial goals. Because your budget will play a key role in making sound financial decisions for your business, it should be one of the first tasks you tackle to improve business success.

And, as a  financially savvy owners, you’ll also want to have a budget in place to help you:

• Make sound financial decisions.  In many ways, your business budgets are like a financial road map. It helps you evaluate where your  business finances  currently stand—and what you need to do to hit your financial goals in the future for business growth.
• Identify where to cut spending or grow revenue.  Your business budgets can help you identify areas to decrease your spending or increase your revenue, which will increase your  profitability  in the process, outline unexpected costs, and help your sustain your business goals.
• Land funding to grow your business.  If you’re planning to apply for a business loan or raise funding from investors, you’ll need to provide a detailed budget that outlines your income and expenses.

Now that you understand why budget creation is so important to your business decisions, let’s jump into how to do it.

Business Budget Step 1: Tally Your Income Sources

First things first. When building a small business budget, you need to figure out how much money your business is bringing in each month and where that money is coming from – this will hep create an operating budget based on your business income.

Your sales figures (which you can access using the Profit & Loss report function in FreshBooks) are a great place to start. From there, you can add any other sources of income for your business throughout the month.

Your total number of income sources will depend on your business model.

For example, if you run a  freelance  writing business, you might have multiple sources of income from:

• Freelance writing projects
• A writing course you sell on your website
• Consulting with other writers who are starting small businesses

Or, if you run a brick-and-mortar retail business, you may only have one source of income from your store sales.

However many income sources you have, make sure to account for any and all income that’s flowing into your business—then tally all those sources to get a clear picture of your total monthly income to build your master business budget template.

Business Budget Step 2: Determine Fixed Costs

Once you’ve got a handle on your income, it’s time to get a handle of your costs—starting with fixed costs.

Your fixed costs are any expenses that stay the same from month to month. This can include expenses like rent, certain utilities (like internet or phone plans), website hosting, and payroll costs.

Review your expenses (either via your bank statements or through your FreshBooks reports) and see which costs have stayed the same from month to month. These are the expenses you’re going to categorize as fixed costs.

Once these costs are determined, add them together to get your total fixed and variable costs expense for the month.

TIP:   If you’re just starting your business and don’t have financial data to review, make sure to use projected costs. For example, if you’ve signed a lease for office space, use the monthly rent you will pay moving forward.

Business Budget Step 3: Include Variable Expenses

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Variable costs don’t come with a fixed price tag—and will vary each month based on your business performance and activity. These can include things like usage-based utilities (like electricity or gas), shipping costs, sales commissions, or travel costs.

Variable expenses will, by definition, change from month to month. When your profits are higher than expected, you can spend more on the variables that will help your business scale faster. But when your profits are lower than expected, consider cutting these variable costs until you can get your profits up.

At the end of each month, tally these expenses. Over time, you’ll get a sense of how these expenses fluctuate with your business performance or during certain months, which can help you make more accurate financial projections and budget accordingly.

Business Budget Step 4: Predict One-Time Spends

Many of your business expenses will be regular expenses that you pay for each month, whether they’re fixed or variable costs. But there are also costs that will happen far less frequently. Just don’t forget to factor those expenses when you create a budget as well.

If you know you have one-time spends on the horizon (for example, an upcoming business course or a new laptop), adding them to your budget can help you set aside the financial resources necessary to cover those expenses—and protect your business from unexpected costs in the form of a sudden or large financial burden.

On top of adding planned one-time spends to your budget, you should also add a buffer to cover any unplanned purchases or expenses, like fixing a damaged cell phone or hiring an IT consultant to deal with a security breach. That way, when an unexpected expense pops up (and they always do), you’re prepared!

Business Budget Step 5: Pull It All Together

You’ve gathered all of your income sources and all of your revenue and expenses. What’s next? Pulling it all together to get a comprehensive view of your financial standing for the month.

On your businesses master budget, you’ll want to tally your total income and your total expenses (i.e., adding your total fixed costs, variable expenses, cost of goods, and one-time spends)—then compare cash flow in (income) to cash flow out (expenses) to determine your overall profitability.

Having a hard time visualizing what a business budget looks like in action? Here’s an operating budget example to give you an idea of what your new business budget might look like each month:

A Client Hourly Earnings: $5,000 B Client Hourly Earnings: $4,500 C Client Hourly Earnings: $6,000 Product Sales: $1,500 Loans: $1,000 Savings: $1,000 Investment Income: $500

Total Income: $19,500

Fixed Costs

Rent: $1,000 Internet: $50 Payroll costs: $5,000 Website hosting: $50 Insurance: $50 Government and bank fees: $25 Cell phone: $50 Accounting services : $100 Legal services: $100

Total Fixed Costs: $6,425

Variable Expenses

Sales commissions: $2,000 Contractor wages: $500 Electricity bill: $125 Gas bill: $75 Water bill: $125 Printing services: $300 Raw materials: $200 Digital advertising costs: $750 Travel and events: $0 Transportation: $50

Total Variable Expenses: $4,125

One-Time Spends

Office furniture: $450 Office supplies for new location: $300 December business retreat: $1,000 New time tracking software: $500 Client gifts : $100

One-Time Spends: $2,350

Expenses: $12,900

Total Income ($19,500) – Total Expenses ($12,900) = Total Net Income ($6,600)

Above all, once you have a clear sense of your profitability for the month, you can use it to make the right financial decisions for your small business moving forward.

For example, if you realize you’re in the red and spending more than you earn, you might cut your spending and focus on  finding new clients . Alternatively, if your income is significantly higher than your expenses, you might consider investing your profits back into your business (like investing in new software or equipment).

Use Your Business Budget to Stay on Track

Putting in the work to create a budget for your small business may seem like a hassle. But while it takes a bit of time and energy, it’s worth the extra effort. Thorough business budgeting gives you the financial insights you need to make the right decisions for your business to grow, scale, and prosper in the future.

This post was updated in October 2023

Written by Deanna deBara , Freelance Contributor

Posted on June 20, 2017

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The Ultimate Guide to Budgeting for Small Businesses

By Andy Marker | March 4, 2022

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Creating a budget for your small business can be daunting, but doing so is essential for any successful company. We’ve rounded up expert tips and created a step-by-step guide for designing a strong small business budget.

Included on this page, you’ll learn why a budget is necessary for small businesses and how to create a budget using Excel . Plus, you’ll find a free, downloadable small business budget starter kit .

What Is a Small Business Budget?

A small business budget is a detailed outline of your financial status and projection, based on your historical financial data. It includes your projected income and expenses and is used to determine where your money is best spent.

Ahmet Yüzbaşıoğlu, the Co-Founder of Peak Plans , explains the importance of budgeting for small businesses: “The success of your business is determined by the quality of your decisions. If you want to make informed decisions, you must have a budget. A budget can help you create a plan for the future, whether it's for your company as a whole or for smaller departments. More importantly, [a budget] gives you guidelines with which to make decisions. If budgeting is not yet a part of your business strategy, it may be worth considering it as an option to provide you with insights that can help you to better plan for all aspects of your company.”

Do Small Businesses Need a Budget?

All businesses should have a budget, especially small ones with less room for errors. A small business can better weather periods of low income by knowing exactly where its money is going, forecasting sales, and identifying what can be cut when needed.

Stephen Light, the Co-Owner of Nolah Mattress , gives his take on why all small businesses should have a budget in place: “For small businesses, creating an effective budget is one of the most important tools to carve a successful path to profitability. Budgets are crucial for allocating funds efficiently and curbing any unnecessary or wasteful spending, [which is] an easy trap to fall into if you don’t have a framework or goalposts to stay within. Budgets are especially important to small business owners who might be using their personal funds.”

How Much Should a Small Business Budget Be?

Your budget should be based on historical financial data and not exceed what you expect to make in the budgeted period. Be realistic with your numbers and projections so that you do not find yourself in a position you cannot recover from.

Your budget should take into account all of your sources of revenue and all of your expenses, as well as an additional percentage for any emergencies or surprises. 

“Small businesses should absolutely be sure to pad their budget with contingency funds for unseen expenses,” suggests Light.

Larger businesses tend to make budgets annually , but for a small business, especially at first, it is a good idea to break down your budget monthly. To get started and identify a realistic monthly budget for your business check out our small business monthly budget templates for Google Sheets.

Importance of Budgeting in a Small Business

A budget helps a small business anticipate challenges, achieve and track financial targets, and secure investment opportunities. A well-considered budget should help a small business to encounter fewer unforeseen expenses and more opportunities. 

Below are some benefits of having a strong budget:

• Make Informed Decisions: A company can make more informed decisions more efficiently when they have a budget. A good budget is built on historical data and allows you to learn from your experience. “Budgeting is a great strategy for maintaining informed control of your business. You can use data insights to plan with greater clarity and organize all of your finances in one place. This allows your leadership team to have the necessary information to drive their decision-making processes more efficiently, which is a great way for your business to act on its data,” explains Yüzbaşıoğlu.
• Identify Growth Opportunities: With a budget in place, you can identify the most profitable projects for your company. Use your budget data over time to see where current resource allocation provides the most payoff. As Yüzbaşıoğlu says, “You can use budgeting to create assumptions about your business projections by measuring the effects of different investments on your business. For example, you can make conclusions about how much revenue an investment in sales will bring in with the information gathered from your marketing efforts. By evaluating different scenarios, you can consider your options for best achieving your goals. Observing different scenarios will soon help you find which strategies work best for your business.”
• Weather Leaner Business Times: All businesses should expect to encounter lean times. Having a budget in place can help you stay afloat by tracking which times are historically slow and by establishing an emergency fund. Knowing when to spend your money can be just as important as what you spend it on.

• Manage Risk: A well-crafted budget can help you to identify potential risks by gaining visibility into your spending. If you don’t track your money, it is easy to spend much more than you had planned (on an unsound investment). “Looking ahead is important for risk management ,” says Yüzbaşıoğlu. “Budgeting is a good way of looking ahead and contains similar methodologies as risk management. A budget allows you to look ahead and see how your activities in different areas will affect the company’s cash flow, earnings, and profitability.”
• Measure Performance: Having access to current and historical financial data from your business allows you to measure financial performance year over year. Without tracking this information, you cannot know which goals you are meeting. “Budgets are the most important tools that managers use to measure how well an organization is doing. Although budgets are commonly perceived to exist for financial purposes only, they can also be key tools to provide insight into how an organization and its departments are performing. Identifying variances — such as differences in expenses and costs and increase or decrease in sales and profits — will give a good overview to management about the performance of the company and its departments,” explains Yüzbaşıoğlu.
• Set Company Goals: A budget is a great place to start goal setting. Whether you aim to spend less over time or drive more sales, a budget gives you concrete numbers on which to base your financial goals. “When all parties are on the same page about the strategic goals of the company and the means of attaining them, it is much simpler to monitor success and work together to keep the organization on track to achieve its goals,” suggests Mains.

What Should a Small Business Budget Include?

A small business budget should include all income and expenses the business accrues over a given period. These numbers may change month to month, so it is important to either use an average, or to overestimate expenses and underestimate income.

Linn Atiyeh, the CEO and Founder of Bemana , highlights some major small business budget expenses that may not be immediately obvious. “[The expenses] need to include everything, from the employees themselves to the office spaces that they work in. They need to include technology, software, onboarding, training, client acquisition, insurance payments, marketing, product development, employee compensation, and any other anticipated costs,” she says.

The following bullets outline what to include in your budget:

• All Income and Expenses: Your budget should consider the entirety of your income and expenses. Note fixed and variable costs. It may also be beneficial to keep track of which expenses you can easily cut during lean times.
• Small Business Financial Plan: When creating your budget, consult your financial plan. If you do not have one, create an income statement and a cash flow statement . “You must incorporate your cash flow in your projections. Cash flow refers to the total amount of money that flows into and out of a firm. If you have positive cash flow in your firm over a certain period of time, this means that more money is flowing into your business than is leaving it,” says Mains. To learn more, read our how-to guide on creating a small business financial plan.
• Historical Sales Numbers: If you have them, use your historical sales numbers to project your income during the same time period in the future. If you don’t have historical data, start tracking it. As you continue to track this information, you will get a better idea of how much money your company is making and spending at different times of the year.
• Sales Forecasts: Create a sales forecast and use it to estimate your projected income. This information will help give you a target number for your budget.
• Emergency Fund: Any strong budget will include some wiggle room for emergencies and surprise expenses. Most sources recommend keeping three to six months’ worth of business expenses in an emergency fund — but remember that some money saved is better than none at all.
• Seasonal and Industry Trend Information: Most industries have slow seasons and busy seasons, and it is important to know when those times are. If you don’t have this information from your own business, a quick Google search can often tell you the answer.
• Growth Projections: Factor any expectations for major growth into your budget, such as opening a new storefront, buying new equipment, or hiring and training a new department.

How to Create a Budget for a Small Business

To create a budget for your small business, determine how much money your company spends and makes, and estimate how it will do so in the future. We’ve outlined how to create a budget in the steps below:

1. Gather Your Financial Information

This includes all income and expense information from previous years and any previous budget information you may have.

“To begin with, collect financial data, predictions, and market analysis to aid in the development of your small company's budget planning,” suggests Lattice Hudson, Business Coach and Owner of Lattice and Co . “To design your budget, consider the company's overall business and overall strategy in addition to the crucial financial data and analytics.”

2. Add Up Your Income

Use a small business budget template or spreadsheet to itemize and add up your income. Consider using a tool that tracks itemized income monthly so that you can more easily note changes over time.

3. Subtract Fixed Costs

Your fixed costs won’t change month to month, so they are the easiest to subtract from your income. Fixed costs might include rent, salaried employees, and non-variable utilities.

4. Determine and Subtract Variable Expenses

Not all costs are fixed, so you may need to do a little digging to determine some of your expenses. Calculate how much the company spent on hourly employees, variable utilities, and break room snacks and business lunches. 

“Variable costs are those that change from month to month depending on your company's success, [such as] consumption-based utilities, delivery charges, transport costs, and sales commissions. When your earnings are greater, you may spend more on variable costs, but when your earnings are lower, you should aim to cut back where you can,” says Hudson.

5. Profit and Loss Statement

Prepare a profit and loss statement from the data you’ve collected. Outline how much your company made and spent in a given time period. This will be the first indicator of what your budget numbers should look like.

6. Outline a Forward-Looking Budget

Create your budget using the numbers from historical profit and loss statements. Your income and expenses may grow or shrink over time, so it is important to calculate an average or to add a buffer to your expenses. Your budget should always have money left over for incidentals, as well as allocation to an emergency fund. 

Hays Bailey, the CEO and Founder of Sheqsy , recommends that you also include allocations for expansions or growth if you can see either on the horizon.

7. Review on a Schedule

Review your budget periodically. Track your income and expenses monthly, and update your budget as things change. “Over time, you will gain a better understanding of your company's operations and will be able to make more informed decisions regarding your budgeting plan,” says Hudson.

How to Create a Small Business Budget Spreadsheet in Excel

Microsoft Excel makes it easy to organize and chart your small business budget over time. The following tutorial lays out step by step how to use a template in Excel to add up your income and expenses and determine your business’s cash flow.

Gather and Organize All Relevant Financial Information for Your Business

To start your budget, you will need to gather and organize all of your financial information for the previous period. This includes income statements, expense reports, cash flow documentation, and any other relevant documents. If this is your first budget and you do not have these items, organize your bank statements, invoices, payroll information, and receipts. 

By organizing your data into these documents, each month becomes easier to track than the last. The more you stay organized, the simpler it will be to maintain your budget.

Download a Small Business Budget Template

• Download the small business budget template for Microsoft Excel.

Record Your Monthly Income

Record Your Monthly Expenses

Record Your Cash Flow

Save and Update Your Budget Regularly

Store your budget template on an accessible drive and update it regularly. Small businesses should update their budget and cash flow as often as possible to stay up to date.

Small Business Budget Example

Download Small Business Budget Example Microsoft Excel | Google Sheets

In this example of a small business budget, we’ve listed sample income, expense, and cash flow information using categories that are relevant to a small retail business. This template is fully customizable and can be used for a small business in any industry. You can also download a blank version of this template in the small business budget starter kit below.

Tips for Creating a Small Business Budget

Creating a budget for your small business can be daunting. To help you get started, we’ve gathered expert tips, from finding a mentor to setting realistic goals.

• Be Realistic: Keep all financial estimates in the realm of reality. Use historical financial data from your own past whenever possible. “My best tip is to avoid any wishful thinking or dreaming about best-case scenarios because it’s always better to use the real data from years past and to be realistic — you’ll avoid disappointment and tricky financial situations that way,” suggests Light.
• Note Changing Costs: Products and services don’t always cost the same amount every year. Be sure that the expenses listed in your budget are accurate at all times. “Be very mindful of the rapid rate at which prices can change and to get as many quotes as possible to inform your budget,” says Atiyeh. “On the first of these points, you may incorrectly assume that the amount you paid for a service in the past is still a good indicator of how much it would cost today. However, services are priced based on a multitude of factors, such as demand and market circumstances. Keep this in mind when creating a budget.”
• Find a Mentor: Doing so can cut down on the time it might take you to learn about business budgeting on your own. “Find someone who has experience in making budgets. Making a budget is technical and it requires experience if you want it to be done right. Of course, you are also allowed to do it on your own, but expect that it is going to take time and that you are in for lots of revisions,” warns Bailey.
• Overestimate Your Costs: Overestimating your costs helps ensure that your finances aren’t threatened when surprises come up or projects go over budget. You will be much better equipped to weather financial hardship if you’ve made room in your budget to respond to unexpected changes. “If your company works on a project-by-project basis, you are well aware that every customer is unique and no two projects will be precisely the same in their outcome. It is often impossible to forecast when a project may run over budget,” says Mains. “So much of running a company is about anticipating and responding to the unexpected. For small company owners, failure to predict an expenditure or its scale may be devastating and may cause the organization to become crippled before it has had a chance to mature and develop. Company owners must overestimate their costs to protect themselves from financial risk. This is a survival strategy that will assist business owners to protect themselves against danger and failure.”

What Specific Types of Businesses Should Consider when Budgeting for a Small Business

Budgeting for any business involves adding up income, subtracting expenses, and identifying where to spend and save money. Because different industries require different strategies, we’ve created a list of things to consider for specific small business types.

“One thing that is unique to small businesses as a whole is that there are so many different types of businesses. This means that there is no one-size-fits-all budget plan for small businesses. Each business should tailor its budget plan to its own specific needs and circumstances,” explains Lindsey Hyland, Founder of Urban Organic Yield .

• Seasonal Businesses: Some small businesses, such as those based around holidays or gardening, operate at a much higher business volume at certain times of the year. These businesses need to consider that their busy season will bring in much more income than their slow season(s). One way to tackle this is to take an average of your monthly income for the year and use that as your monthly operating budget. Don’t project based on the biggest numbers — use the smaller numbers or an average. For these businesses, it is especially important to establish an emergency fund so that a surprise expense during the slow season doesn’t become a catastrophe.
• Recruitment and Staffing: Businesses that deal with recruitment and staffing need to have a finger on the pulse of the businesses they work with. Do outside research into the growth or downscaling of other businesses to determine budget numbers for a given period. “Since my company is in the industrial and equipment recruiting industry, one unique challenge that we face is having to incorporate the needs of other businesses into our budget. For instance, it's important that we stay mindful of how much these businesses are upscaling or downscaling their operations at any given time, as that directly impacts the provision of our services,” says Atiyeh.
• E-commerce: Online businesses may have fewer fixed costs, such as rent, but may have more variable ones. Shipping costs, shipping zones, import taxes, and shipping supplies will change based on sales volume, so find an average or inflated number that works for these budget items. Companies that operate exclusively online should also invest in a well-made, working website and have a system in place for potential returns. These two things will help improve remote customer service, which can lead to more sales — and a larger budget — in the future.
• Nonprofits: Not-for-profit businesses are funded in a variety of ways, including through grants, donations, and dues. For these businesses, it is even more important to keep the budget as realistic as possible at all times, as there is commonly less money to move around. For more information and to help keep your budget balanced, peruse our list of free nonprofit budget templates .
• Inventory Business: Remember that it can be very expensive to keep large amounts of inventory on hand. Buying more of a product to sell can sometimes be cheaper because of the economy of scale, but ensure you have the space and capacity to hold on to things that don’t sell right away. Consider that you may need to spend more on rent and temperature control for a place to store these items.
• Custom Orders: The price of a custom order is not only the cost of the finished product, but a combination of factors. Determine a cost for your time and labor for conception, execution, materials, and delivery, and factor those into your expenses.
• Startups: Budgeting for a company with no existing financial history can be tough. Company owners will need to do research on the industry and use those numbers to create a rough estimate for their budget. When you are estimating a budget from scratch, be sure to overestimate your costs to mitigate risks. It is always a good idea to ask professionals and people with experience. Visit this list of free customizable startup budget templates to get started.
• Construction: Construction companies need to factor in the cost of all associated permits and insurance on top of all of the general costs of doing business. Permits and insurances may change based on the specific job you are doing, so it is critical to factor those costs into the relevant monthly budget. To help keep you organized, check out this list of free construction budget templates .
• Service: Businesses based on service need to put a larger portion of their budget toward staff training and retention. Better employees mean better service, and much of an employee's ability comes from their training. Additionally, you do not want to lose the valuable employees you spend time and money training, so these businesses need to factor in rising pay scales for more qualified staff.
• All Small Businesses: Do not forget to factor in taxes and fees involved in running your business. If you don’t know what they are, ask a professional for help. “There are a shocking number of people that do not make any self-employment tax payments to the IRS for lack of fear or know-how,” says Stevenson.

How to Manage a Small Business Budget

Manage your small business budget by spending within your means and saving money where you can. Make sure your budget is as realistic as possible, and update and revise it on a regular basis.

• Spend Within Your Means: Whenever possible, do not spend more money than you make. Use loans and credit wisely so as not to dig yourself into a hole. “Make do with what you have, start small with the free versions of software before you upgrade. Save for equipment. Make room in the budget later if you can’t afford it now,” advises Stevenson.
• Get Multiple Quotes: When you work with other businesses, it is in your best interest to get multiple quotes. You can use these quotes to negotiate the prices of goods or services that you need to run your own business, and save money in your budget. “By getting as many quotes as possible, you can build a more accurate understanding of the true prices of what you'll need throughout the period of time that you're budgeting for. By getting quotes from several sources rather than just one or two, you can make sure that your estimates are fair and accurate,” suggests Atiyeh.
• Revisit Your Budget Regularly: Circumstances can easily change from month to month or year to year. “The best way to stay on budget is to revisit the budget regularly. Budgets shouldn’t be set and then put away, they should be consistently reassessed and adjusted. If you’re committed to tweaking and allowing your budget to evolve with a watchful eye, you’re far more likely to stay within its bounds,” says Light.
• Be Realistic from the Outset: It is easy to get carried away with lofty goals and underestimated expenses. The closer your budget reflects reality, the easier it will be to stick to the plan. “Don’t underestimate expenses just to make your budget look conservative, because a budget that’s unrealistic is so much worse than not having a budget at all. It is misleading and it can cause lots of problems in the long run,” warns Bailey.

How to Do a Small Business Budget Efficiently

There are three key ways to help ensure that you manage your small business’s budget efficiently: Use the tools that are available to you, review your financial data on a schedule, and seek help when you need it.

• Use Software Tools: There are many software tools that can help you to create a budget. Many offer free trials so that you can find the one that works best for you. You may also find that a template suits your needs.
• Hire Help: Consider using the professional services of a financial advisor, or hire an accountant to manage your budget. For many businesses, hiring someone to manage the money is an inevitability that should be considered sooner than later.
• Create a Review Schedule: Small businesses should record budgets monthly. Track and store your monthly budget data so that you can reference it for future months and make changes as needed.

Small Business Budget Starter Kit

Download Small Business Budget Starter Kit

We’ve created this small business budget starter kit to help you get started creating and maintaining a budget. We’ve included a blank budget template from the example above, plus powerful cash flow and income statement templates to help keep you organized and on track. We’ve also included a customizable budget checklist so that you can ensure you’re tracking all of the information you need, every time.

Small Business Budget Template

Download Small Business Budget Template Microsoft Excel | Google Sheets | Smartsheet

Use this blank small business template to calculate your income, expenses, and a simplified cash flow. This powerful template adds up your itemized income and expenses each month, giving you a running total while in progress and a yearly total once completed.

Small Business Budget Checklist

Download Small Business Budget Checklist Microsoft Excel | Adobe PDF | Google Sheets

This customizable small business budget checklist will help ensure that you’ve included all income and expenses in your monthly budget. The checklist includes a list of some of the most common business expenses, but you can edit it as needed.

Small Business Income Statement Template

Download Small Business Income Statement Template Microsoft Excel | Google Sheets

Use this small business income statement template to track your company’s total income and expenses over time. Customize it to track by month, quarter, or year, and use it to complete the income and expense information on your budget template.

Small Business Cash Flow Statement Template

Download Small Business Cash Flow Statement Template Microsoft Excel | Google Sheets

Use this small business cash flow statement template to follow your cash income and expenses. Input your cash flow in the appropriate cell, and compare the current to the previous time period. The template will generate your total cash payments and ending cash position, which will help you fill in your budget template.

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How to create a business budget

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Key takeaways

• A business budget is a financial plan that helps estimate a company's revenue and expenses, making it an essential tool for small businesses
• The steps to creating a business budget include choosing budget and accounting software, listing expenses and forecasting revenue
• If a business finds itself in a budget deficit, strategies such as cutting costs, negotiating with suppliers and diversifying revenue streams can help

As a small business owner, keeping your finances organized through a business budget is crucial to running a successful company.

Business budgeting involves creating a financial plan that estimates future revenue and expenses to make informed financial decisions, which can ultimately move the needle on your business’s financial goals and help it grow in profitability.

What is a business budget?

A business budget is a financial plan that outlines the company’s current revenue and expenses. The budget also forecasts expected revenue that can be used for future business activities, such as purchasing equipment. It sets targets for your business’s revenue, expenses and profit and helps you determine if you’ll have more money coming in than you pay out.

A business budget is an essential tool that helps you make wise business decisions. Without it, it’s difficult to gauge your business’s financial health.

What is the difference between a cash flow statement and a business budget?

A cash flow statement  (CFS) is a financial document that summarizes the movement of cash coming in and going out of a company. The CFS gauges how effectively a company manages its finances, including how it manages debt responsibilities and funds day-to-day operations.

It’s similar to a business budget in that you can see expenses and revenue. But while a budget gives a moment-in-time snapshot of your business’s financial performance compared to forecasts, the cash flow statement focuses on the actual inflows and outflows of money through your business.

Follow these steps to ensure a well-developed budget, from understanding your expenses to generating revenue and adjusting expenses to balance the budget.

1. Choose a budget and accounting software

First, you’ll want to store your expense and revenue information with accounting software to help you track your numbers and generate reports. Some software may also help you assign categories to the transactions, identify tax deductions and file taxes. Quickbooks is an example of accounting software.

Some business bank accounts also have accounting software built in, helping you stay organized by keeping your accounting and banking in one place.

2. List your business expenses

The next step in creating a small business budget is to list all your business expenses. Here are the types of expenses you want to include in your budget:

• Fixed expenses: Fixed expenses cost a fixed amount monthly or within the assessed period. Those costs include rent, insurance, salaries and loan payments.
• Variable expenses: Variable expenses can change monthly or over time, making them trickier to budget. This might include materials, direct labor, utility bills or marketing expenses.
• Annual or one-time costs: Some costs only occur a few times per year, while others you’ll only pay for as needed, such as buying new equipment. You still want to budget for these expenses by allocating a portion of your weekly or monthly budget toward one-time expenses.
• Contingency funds: Unexpected business costs can throw a wrench in your budget if not planned for. Such costs could include emergency repairs, necessary equipment purchases, sudden tax increases or unforeseen legal fees. To plan for these costs, you can create a contingency or emergency fund that’s separate from your operational budget.
• Maintenance costs: To allocate funds for maintenance costs, begin by including regular inspections and maintenance in your budget. Then, make sure to leave room for changes and unexpected maintenance costs.

3. Forecast your revenue

To estimate your future revenue, start by deciding on a timeline for your forecast. A good place to start is the previous 12 months. Your accounting software may also include revenue forecasting as one of its features, which can automate this step for you.

The timeline and your recent past growth can help you understand how much revenue you’ll generate in the future. Consider external factors that could drive revenue growth, such as planned business activities like expansion, marketing campaigns or new product launches.

You’ll also want to think about anything that might slow your growth. Many businesses experience seasonal fluctuations, which can impact your budget if you don’t plan for it. To account for these changes, list the minimum expenses required to keep your business running. Use your financial statements to understand these costs, and consider averaging out irregular expenses over the year to avoid surprises.

Ideally, your business should build a cash reserve during profitable periods to cover expenses during slower seasons. If necessary, consider various financing options, such as a business credit card or line of credit, that you can draw from to manage cash flow during peak or off times.

4. Calculate your profits

The next step in creating a business budget is to calculate your business profits. You can look at your total profits by calculating revenue minus expenses. That way, you see how much money you have to work with, called your working capital .

You should also understand your profit margins for each of your products and services, which can help you set prices or decide whether to offer a new product or service.

How to calculate your profit margins

To find out your gross profit margin, you’ll first need to calculate the gross profit. To calculate your business’s gross profit, subtract the cost of goods sold (COGS) from your total revenue. COGS includes all the expenses related to producing your products and services.

Once you have the gross profit, use the gross profit margin formula: (Revenue – COGS) / Revenue x 100. This will give you a percentage that shows how much profit you gain from that particular product after accounting for the product’s costs.

5. Make a strategy for your working capital

Knowing what to do with extra revenue, which is your working capital, is crucial for managing your business finances and growth. Here’s how to get started with a financial strategy that propels your business goals forward:

• Set spending limits for different categories in your budget. When listing your expenses, you should have set a dollar amount for each category. You can estimate this by a monthly average or a general forecasted amount.
• Set realistic short- and long-term goals. These goals will motivate you to stick to your budget and guide your spending decisions.
• Compare your actual spending with your net income and priorities. Look at the areas you’re spending and consider whether you need to reallocate money to different categories. Consider separating expenses into business needs and extras.
• Adjust your budget and actual spending. Adjust your spending to ensure you do not overspend and can allocate money towards your goals. If you need to cut spending, consider the categories that are extras, such as types of marketing that you don’t know will generate a return on investment.

6. Review your budget and forecasts regularly

Finally, review your budget regularly. By frequently checking in on your budget, you can identify any discrepancies between your planned and actual expenses and adjust accordingly. This allows you to proactively handle any financial issues that may arise rather than reacting to them after they’ve become a problem.

Regular reviews also allow you to refine your budgeting process and improve its accuracy over time. Keep in mind that your budget is not set in stone but rather a tool to guide your financial decisions and help you achieve your business goals.

What to do if you have a deficit in your business budget

Finding a deficit in your small business budget can be alarming, but there are several strategies you can employ to handle this situation.

• Do a cash flow analysis. Begin by doing a cash flow analysis to review what your business is earning and spending money on. Identify potential problems and adjust the budget as needed to prevent overspending.
• Cut nonessential business costs. Cutting spending may involve eliminating nonessential costs and transferring funds from other categories to overspent categories. Your goal is a balanced or profitable budget.
• Negotiate with suppliers. Be transparent in your communications with suppliers and explain your quality standards and why you’re seeking cost reduction. Explore options for cost reduction that do not compromise quality, such as process improvements or ordering in larger quantities.
• Create a lean business model. By removing anything that doesn’t benefit your customer, your business can potentially save time and resources. Lean business models focus on continually improving processes and customer experience without adding additional resources, time or funds.
• Add revenue and diversify revenue streams. Raising revenue requires a realistic plan with measurable goals to increase sales and overall business income. You can also consider other products and services you could offer that would make your business profitable.
• Use financing to cover temporary gaps. Applying for a small business loan can help pay bills during an unplanned shortfall. Since this will add an expense to your budget, make sure you can handle the loan repayments and your regular expenses.
• Plan for a deficit. In some cases, a planned budget deficit might be a strategic decision, such as investing in new opportunities that promise long-term benefits.

Bottom line

Having a well-developed business budget is crucial for making informed decisions. You can effectively manage your small business’s finances by tracking and analyzing your business’s inflows and outflows, forecasting your expected revenue and adjusting your budget to stay balanced.

Even in the face of a budget deficit, there are various strategies you can use to keep your business profitable, including negotiating costs with your suppliers, assessing your business operations and offering new products and services.

With a solid business budget in place, you can confidently navigate financial challenges and drive long-term success for your small business.

Frequently asked questions

What are the benefits of a business budget, what are the components of a business budget, how do you calculate fixed and variable costs in a business budget, related articles.

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How to Create a Business Budget for Your Small Business

According to a study done by CBinsights, a few of the top reasons why small businesses fail include include pricing and cost issues, losing focus and running out of cash. These issues can be prevented by having a realistic budget in place.

Before you can focus on the budget, however, you need to identify what aspects of your business you’d like to improve. This will allow you to decide what can be done with your funds. Based on that list, you can set up short-term and long-term goals.

These goals will be directly affected by your incoming and outgoing cash. A short-term goal can be paying off a debt or purchasing new equipment. Long-term goals, like keeping aside marketing expenses, are crucial because they are connected to the overall growth of your business.

You should be practical about the goals you set. They should be purely based on your business’ capacity to spend and save. Once you have your goals in place, you can create an effective, foolproof budget by following these steps.

1. Analyze costs

Before you start drafting a budget, you must research the operating costs involved in your business. Knowing your costs inside and out gives you the baseline knowledge needed to craft an effective spending plan.

If you create a rough budget and later discover that you need more money for your business activities, this will jeopardize your goals. Your budget should be such that you can increase your revenue and profit enough as your business expands to handle your growing expenses. Your budget should factor in fixed, variable, one-time, and unexpected costs. Some examples of a fixed expense are rent, mortgages, salaries, internet, accounting services, and insurance. Examples of variable costs include cost of goods sold and commissions for labor.

There is not much harm in overestimating the costs involved since you will need enough cash to handle your future expenditures. If your business is new, then you must include start-up costs as well. Planning the budget this way will help you make informed decisions and tackle any unwanted financial surprises.

2. Negotiate costs with suppliers

This step will be useful for those businesses which have been functional for more than a year and are dependent on suppliers to sell products. Before you get started on your yearly budget, have a chat with your suppliers and try getting discounted rates for the materials, products, or services you need before you make your payments.

Negotiations allow you to create trustworthy relationships with your suppliers. This will be helpful when incoming cash is thin. For example, you might have a seasonal business. When you have enough cash saved, you can pay advance amounts to your suppliers as compensation for the times when you are unable to make payments. The main goal here is to find efficient ways to reduce cost of doing business.

3. Estimate your revenue

Many businesses have failed in the past by overestimating revenue and borrowing more cash to meet operational needs. This defeats the very purpose of creating a budget. To keep things realistic, it’s a good idea to analyze previously recorded revenue. Businesses must track revenue periodically on a monthly, quarterly and annual basis.

Your previous year’s revenue figures can act as a reference point for the upcoming year. It’s important to rely solely on this empirical data. This will help you set realistic goals for your team, leading to the eventual growth of your business.

4. Know your gross profit margin

The gross profit margin is the cash you are left with after your business has dealt with all the expenses at the end of the year. It gives insight into the financial health of your business. Here’s an example of why you need to understand this parameter while creating a budget.

Suppose your business made a revenue $5,000,000 and yet there are debts to be paid. At the end of the year, your expenses are more than your revenue, which is not a good sign for a growing business. This tells you that you must identify the expenses that are not benefiting the business in any way and eliminate them. The best way to do this would be to list out the cost of goods sold for all materials and deduct them from the overall sales revenue. This information is needed to get a real picture on how your business is faring, allowing you to increase profit and reduce costs.

5. Project cash flow

There are two components to cash flow : customer payments and vendor payments. You need to balance these two components to keep the cash flowing in your organization.

To do your best to ensure timely customer payments, it’s important to have flexible payment terms and the ability to receive payments through common payment channels. Unfortunately you will need to deal with customers who might not comply to the stated terms. This might affect your cash flow forecast due to missing payments.

You can encourage payment by giving customers a grace period and creating strict business policies for paying late. Beyond this, you must have some money allocated in your budget for ‘bad debt,’ in case the customer never pays.

When you know your incoming cash flow, you can fix an amount for your employee salaries and travel expenses. You can also allocate some money to pay off your fixed vendor expenses. If you are still left with cash, you can then spend on business initiatives such as professional development or new equipment.

6. Factor in seasonal and industry trends

It’s unrealistic to expect that you will achieve every business goal and reach your estimates every month. In an annual cycle, there will be months where your business will be booming, and there may be a few months where sales are slow. Due to seasonal inconsistency and industry trends, you will have to spend cash effectively so that the business isn’t at risk of shutting down during slower periods.

To overcome this challenge while creating a budget, gather insights as to when your business performs better. The aim should be to generate enough revenue during peak months to sustain the business during off seasons.

For example, let’s assume that you are a business owner of a winter clothing company. Your products are on demand only during that season, so most of your revenue comes during that period. For the rest of the year, you can use the earnings to keep the business going and market to specific target groups, like hikers or travelers. This will help you gauge how successful your products are during off seasons, what revenue to expect, and how much to save during your peak periods.

7. Set spending goals

Making a budget is more than just adding your costs and subtracting them from your earnings. How wisely you spend your money determines how well your business will fare. Goals provide a system to check if your money is being spent on the right areas to avoid unwanted expenses.

For example, if you are spending money on stationary that is going unused for operational or marketing efforts, it may be time to cut those costs. This money can be better applied to your marketing campaigns, bringing in more leads and revenue. Gauge and invest in those expenses that would benefit your business in the long run.

8. Bring it all together

Once you have gathered all the information from the previous steps, it’s time to create your budget. After you have subtracted your fixed and variable expenses from your income, you will get an idea of the amount that you can work with. Be prepared to tackle the unexpected one-time expenses that come your way. You can then find ways to use the money effectively to achieve your short-term and long-term goals.

Role of accounting software in budgeting

Budgeting for a business is a large task, which is why you might need assistance. Creating a budget will involve analyzing costs, estimating revenue, and projecting cash flow. Having an accounting system in place will give you real-time information about your finances, helping you to create a feasible budget.

The key to creating a good budget is to evaluate the previous years’ data and draw realistic projections. An accounting system can give you access to all this information in one place, no matter when you need it.

The effectiveness of a budget also depends on how well any projected goals have been achieved by your business. To check this, an accounting system generates financial reports that record your actuals, and those can then be compared with the budget. Comparing your budget with your actuals is an important step to gauge the effectiveness of a budget.

Budgeting is an essential process, especially for small businesses, as it allows business owners to estimate and allocate money for different business activities. Preparing a budget also gives you a clear idea of the money that can be used to achieve business goals and ensure that there is enough in hand to handle a crisis. For small businesses, it might get a bit difficult to make estimations for the whole year as the initial stages of growing an organization are often volatile. In such cases, you can create smaller budget estimates for a duration of two or three months and keep reviewing it for better results. When an accounting system is introduced, the process becomes even more manageable. You can easily handle tasks like projecting cash flow or estimating costs, and you can set realistic goals for your business.

Related Posts

• Business Budget: What is it & Why is it important?
• How Is Cash Flow Calculated?

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Great article, Easy to read, straight to the point, very informative.

Wonderful article! Just what I needed

a valuable information for person like me who doesn’t has finance background.

wonderful said,

I really like this article, it is very easy to read, gives an idea and try to make the budget process a much easier task

Simple and precise article

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How to Create a Basic Business Budget

8 Min Read | Mar 13, 2024

You’d never intentionally set your business up to fail, right? But if you don’t know your numbers and how to make a business budget, that’s exactly what you’re doing. Money problems and bad accounting are two reasons why many small businesses don’t make it past their first five years. 1

Talking about budgets can feel overwhelming. We get it. For a lot of business leaders, it’s a lot more comfortable dreaming up big ideas and getting stuff done than digging into numbers. But you can’t set yourself up for steady growth until you have a handle on the money flowing in and out of your company. You also can’t enjoy financial peace in your business.

Not a numbers person? That’s okay. Follow the simple steps below to learn how to create a budget for a business and manage your finances with confidence. We’ll even give you a link to an easy-to-use small-business budget template in the EntreLeader’s Guide to Business Finances .

But before we get to that, let’s unpack what a budget is and why you need one.

Don't Let Your Numbers Intimidate You

With the EntreLeader’s Guide to Business Finances, you can grow your profits without debt—even if numbers aren’t your thing. Plus, get a free business budget template as part of the guide!

What Is a Business Budget?

A business budget is a plan for how you’ll use the money your business generates every month, quarter and year. It’s like looking through a windshield to see the expenses, revenue and profit coming down the road. Your business budget helps you decide what to do with business profit, when and where to cut spending and grow revenue, and how to invest for growth when the time comes. Leadership expert John Maxwell sums it up: “A budget is telling your money where to go instead of wondering where it went.”

But here’s what a business budget is not: a profit and loss (P&L) report you read at the end of the month. Your P&L is like a rearview mirror—it lets you look backward at what’s already happened. Your P&L statement and budget are meant to work together so you can see your financial problems and opportunities and use those findings to forecast your future, set educated goals, and stay on track.

Why Do I Need to Budget for My Business?

Creating a budget should be your very first accounting task because your business won’t survive without it. Sound dramatic? Check this out: There are 33.2 million small businesses in the United States. Out of the small businesses that opened from 1994 to 2020, 67.7% survived at least two years. But less than half survived past five years. 2    The top reasons these businesses went under? They hit a wall with cash-flow problems, faced pricing and cost issues, and failed to plan strategically . 3

As a business owner, one of the worst feelings in the world is wondering whether you’ll be able to make payroll and keep your doors open. That’s why we can’t say it enough: Make a business budget to stay more in control and have more financial peace in running your business.

A budget won’t help you earn more money, but it will help you:

• Maximize the money you’ve got
• Manage your cash flow
• Spend less than your business earns
• Stay on top of tax payments and other bills
• Know if you’re hitting your numbers so you can move at the true speed of cash

How to Create a Budget for a Business

Your ultimate goal is to create a 12–18-month business budget—and you will get there! But start by building out your first month. Don’t even worry about using a fancy accounting program yet. Good ol’ pen and paper or a simple computer document is fine. Just start! Plus, setting up a monthly budget could become a  keystone habit  that helps kick-start other smart business habits.

Here’s how to create your first budget for business:

1. Write down your revenue streams.

Your revenue is the money you earn in exchange for your products or services. You’ll start your small- business budget by listing all the ways you make money. Look at last month’s P&L—or even just your checking account statement—to help you account for all your revenue streams. You’re not filling in numbers yet. Just list what brings in revenue.

For example, if you run an HVAC business, your revenue streams could be:

• Maintenance service calls
• Repair services and sales
• New unit installation
• Insulation installation
• Air duct cleaning

2. Write down the cost of goods sold (if you have them).

Cost of goods is also called inventory. These expenses are directly related to producing your product or service. In the HVAC example, your cost of goods would be the price you pay for each furnace and air conditioning unit you sell and install. It could also include the cost of thermostats, insulation and new ductwork.

3. List your expense categories.

It’s crazy how much money can slip through the cracks when we’re not careful about putting it in the budget. Think through  all  your business expenses—down to the last shoe cover your technicians wear to protect your customers’ flooring during house calls. Here’s a list of common business budget categories for expenses to get you started:

• Office supplies and equipment
• Technology services
• Training and education

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4. Fill in your own numbers.

Now that you have a solid list of revenue and expense categories, plug in your real (or projected) numbers associated with them. It’s okay if you’re not sure how much you’ll sell just yet or exactly how much you’ll spend. Make an educated guess if you’re just starting out. If your business has been earning money for a while, use past P&L statements to guide what you expect to bring in. Your first budget is about combining thoughtful guesswork with history and then getting a more realistic picture month over month.

5. Calculate your expected profit (or loss). 

Now, number nerds and number haters alike—buckle in. We’re about to do some basic accounting so you know whether you have a profit or loss. This is your chance to figure out exactly how much you’re spending and making in your business.

Take your  gross revenue (the total amount of money you expect to make this month) and subtract your expenses and  cost of goods sold  to find your profit or loss. Here’s what that calculation looks like:

Revenue - Expenses - Cost of Goods Sold = Profit or Loss

Don’t freak out if your first budget shows a loss. That actually happens a lot with your first few monthly budgets. You’re learning and getting context on what’s coming in and going out so you can make adjustments. Keep doing your budget, and before you know it, you’ll be a rock star at telling your money where to go, planning for emergencies ,  investments and opportunities , and building momentum.  

6. Review your budget often. 

Whew! Once you get that first business budget under your belt, take a deep breath and celebrate. You’ve just done something huge for your business! (You’ll also be happy to know, budgeting gets easier from here since you can copy and paste your first one and tweak your income and expenses each month.)

But here’s the thing: Your budget can’t just sit in a drawer or on your computer. You’ve got to look at it consistently to make sure you’re actually following it.

Weekly Review

At least once a week, someone in your business (whether it’s you, a qualified team member or a bookkeeper) needs to track your transactions so you know what’s happening with your money all month. Then you can make adjustments before you have more month than money.

Every time you review your budget, ask yourself these three questions:

• Are we on target to hit our revenue goal this month?
• If not, what we can change to get there?
• Are there any expenses we can cut or minimize?

Monthly Review

You also need to review your business budget when you close your books every month to compare it to your actuals—your P&L. Otherwise, how can you know how you’re doing?

7. Work toward a 12–18-month budget.

Now that you’ve created your first month’s budget, move on to the next one. You’ve got this! The more budget-building reps you get in, the better you’ll be at looking forward and planning for growth. In no time, you’ll reach that ultimate goal of a 12–18-month budget. Just keep adjusting as you go based on all you’re learning about getting an accurate road map for your finances.

As you start owning your numbers, remember: It’s okay if you’re a little intimidated by the process of accounting and making a budget for business. But it’s not okay to avoid the financial details that will make or break you. So just keep applying the basics we covered and keep moving forward.

Follow the steps above to create your budget, and review it often to stay on track.

Want a tool to make budget building simpler? Check out the EntreLeader’s Guide to Business Finances. It includes an easy-to-use small-business budget template in the extra resources section.

What are the benefits of budgeting?

A business budget will help you:

• Make informed, strategic decisions
• Invest in under-resourced areas
• Trim over-resourced areas
• Plan for the future
• Set goals and track your progress

Does using a small-business budget template save time?

Yes! Using a small-business budget template helps you plug in the numbers you need to operate with more confidence and fewer wrong turns. Check out the small-business-budget template inside our EntreLeader’s Guide to Business Finances .

How do I budget if I own a seasonal business?

Just like farmers put extra hay in the barn to cover leaner months, if you’re a seasonal business owner, you need to set aside resources in times of plenty to cover months your business turns down. Use your P&L statements to go back in time and look at financial performance year over year. Then, create your business budget based on what you learn and on any changes you see coming. You can also go to trade conferences to get an idea of your industry’s seasonal benchmarks.

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About the author

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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7 free small business budget templates for future-proofing your finances

As a small business owner, you're likely balling with a lot more than your personal checking account. If you don't properly manage your business finances, there's more on the line than an overdraft fee—you now have an entire organization to account for.

Small business budgets are necessary to balance revenue, estimate how much you'll spend, and project financial forecasts, so you can stay out of the red and keep your business afloat.

But creating a small business budget template isn't a small task. Since I don't have a business to run, I did the heavy lifting for you—check out these free, downloadable templates for your small business budgeting.

Table of contents:

2. Overhead budget template

3. multiple-project budget template.

4. Startup budget template 

5. Labor budget template

6. cash flow budget template, 7. administrative budget template, periodic budget reviews, how to design your small business budget plan, small business budget faq, 1. static budget template.

Best for: Multiple departments or revenue streams; Industries with complex operations

A static budget combines all the function-specific budgets a business uses into one. Typically, a static budget includes the following items (plus any other budgets your business might use):

Cash flow projections: Estimations of how much money will flow into and out of your business. They also help you decide when, how, and what you should spend money on.

Total expected spending: All estimated expenses, including labor and administrative costs. 

By integrating all of your budgets and projections, the static budget provides a full picture of your business's estimated expenses and financial strategy for the upcoming fiscal year. 

Best for: Service-based businesses

It's easy to forget about expenses that aren't directly tied to production, like delivery charges or utilities. But these costs exist (and can add up quickly), so you need an overhead budget. A detailed overhead budget template will include:

Administration expenses

It compares your budgeted amount to actual figures (warning: it may be a rude awakening) and can help improve accuracy for future financial planning. 

Predicting overhead spending helps you plan how to use other funds more practically too—if you know how much you'll spend on overhead, you can make better business decisions. For example, you'd know whether you can afford to invest money into other initiatives like adding a delivery service or upgrading equipment.

Best for: Project-based industries

If you're managing multiple projects like website development or event planning, each with its own budget and expenses, you need a multiple-project budget to help keep your head on straight. This type of budget will help you track the following items per project:

Product-by-product COGS (cost of goods sold)

Labor costs

Equipment and resource costs

Indirect project expenses like travel

A multiple-projects budget establishes estimates for everything you need to get projects across the finish line. It also lets you track costs to ensure you're not spending more than you accounted for in the budget.

4. Startup budget template

Best for: New small businesses and startups

Startups need to ensure financial success from the get-go, so they can reinvest profit into the business and potentially attract more investors. 

But unlike established small businesses, you don't have past financial data to base expenses on. That's why you need a startup budget to focus on expenses for your first year of business, including items like:

Funding from investors and loans

Licensing and permits

Logo and website design

Website domain

Business software

Security installation 

Overhead expenses

Capital expenses

Best for: Larger businesses with lots of employees

Unless you're a one-person show, you'll need a labor budget. And even if you are a one-person show, it's good to know if you can afford to pay yourself. A labor budget breaks down all employee-related costs like: 

Payroll taxes

Contract labor

Break down employee costs into direct, indirect, fixed, and variable categories to clarify how your company allocates its resources. You can also consider different scenarios more easily when you understand the breakdown of labor costs.

For example, you can simulate the impact of adding or reducing staff in specific departments or assess the effects of different compensation structures on different teams.

An accurate forecast of labor costs ensures you can sustainably meet your staffing needs and can help you make informed hiring decisions. Down the road, it can also help you determine if you can afford to give your staff raises, bonuses, or additional benefits.

Best for: Businesses with fluctuating income and expenses; Seasonal businesses; Retail

As important as it is to be mindful of how much money you're spending, you should also track how much money you're making . A cash flow budget helps estimate how money is flowing in and out of your business. It includes:

Starting balance (set at the beginning of the month, quarter, or year)

Projected cash inflow from all revenue streams

Estimated cash expenditures

Ending balance (calculated at the end of the month, quarter, or year)

This type of budget lets you proactively manage your resources, anticipate potential cash shortages, and strategize for growth. For instance, if you know you're only going to break even this year, you may wait on expanding or making a large investment. 

Best for: Businesses focused on streamlining operations

An administrative budget includes all those general expenses that the company as a whole needs to function. This type of budget accounts for: 

Depreciation expenses

Training and development

Communication expenses

Accounting fees

While you could technically include administrative expenses in an overhead budget and call it a day, a separate administrative budget gives more of an eagle-eye view of how well your business is operating. 

Without an eye on administrative costs, you may be spending unnecessarily or lose focus on areas where it'd be wiser to invest your money. In other words, you could be spending way too much on fancy pens when you should be saving up to upgrade your cash register. 

A budget isn't a "set it and forget it" deal. Regular budget reviews can help you stay on track with your financial goals and respond proactively to changing market conditions. 

You should compare your estimated budget to actual spending. Then you can see where you went over and where you can splurge more. Try to review your budget monthly, quarterly, and yearly.

Monthly: Compare actual performance against your budgeted figures for the month. Identify any deviations and look for insights into cash flow, sales trends, and expense management.

Quarterly: Dive deeper into performance over the last three months. Use trends to project revenue and expenses for the upcoming quarter and identify areas for improvement.

Yearly: Reflect on your long-term financial objectives for the fiscal year. Assess the effectiveness of your budgeting strategies, and set new budget targets for the upcoming year. 

It's cliched but true: you gotta spend money to make money. But that's no excuse to start throwing cash at your business willy-nilly.

Budgeting forces you to prioritize your objectives, so you spend money on the things that matter most. Here's how to create a small business budget in four steps:

Identify your working capital for the budgeting period. Add up your current assets like cash, accounts receivable, and inventory. Then subtract current liabilities like accounts payable and short-term debt. The remaining amount is what you have left to cover your operational expenses during the budgeting period.

Separate business and personal expenses. If you haven't already, open a dedicated business bank account. This makes it easier to track, categorize, and analyze your finances.

Determine your fixed and variable costs. Make a list of costs that stay the same every month (fixed costs) and what changes (variable costs). These will change based on the purpose of the budget. For instance, a labor budget will only consider employee-related costs.

Calculate your total expenses. Add up all the costs for your business, including fixed costs, variable costs, labor, and any other applicable expenses. This total is how much your business needs to run. Any leftover money from your working capital can be allocated toward other business investments. 

Budgeting methods

If you've budgeted before and hated it, you may just have been using an ineffective budgeting method for your preferences. Here are a few budgeting methods to try instead: 

Traditional: This budget is set for a determined amount of time and uses last year's numbers as a benchmark. Once you set your budget, you don't change it unless you get approval for an adjustment.

Rolling: This dynamic approach spans a continuous time frame instead of a fixed time period. As each month or quarter passes, you add a new budget period and drop the oldest period. This lets businesses adjust projections based on real-time performance and market conditions.

Flexible: This budget changes along with your sales forecast. As real-time sales activity deviates from budgeted amounts, you recalculate the budget to reflect the new data. 

Still don't know where to start with your small business budget? Check out the answers to these common questions before you open a new Google Sheet.

What should a business budget include?

A business budget should include all income sources and expenses. Income sources could include projected revenue from sales, loans, or potential investor funding. Expenses may include items like office space rent, employee salaries, insurance, and marketing. Add anything that helps paint a full picture of your finances.

How much does the average small business startup cost?

The average small business startup costs $40,000 in its first year of business. But this will absolutely vary depending on your type of business, unique expenses, and cash income. For instance, there are multiple types of businesses you can start with $10,000 or less.

What is the best free business budgeting software?

The best free budgeting business software will depend on what your business needs, but you can try apps like Mint or Wave. Or you can use a spreadsheet—scroll up for some free small business budget templates.

Automate your small business

Knowing when or where to invest money into your business is just one of the many tasks you have on your plate as a small business owner. Learn how automation for small businesses can help take some of those recurring tasks off your hands, so you can focus on growing your business. 

Related reading:

The best free small business software

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Cecilia Gillen

Cecilia is a content marketer with a degree in Media and Journalism from the University of South Dakota. After graduating, Cecilia moved to Omaha, Nebraska where she enjoys reading (almost as much as book buying), decor hunting at garage sales, and spending time with her two cats.

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Creating a Budget for your Small Business 6 Steps Guide

Free Startup Costs Worksheet

Rudri Mehta

• January 17, 2024

Starting a new business requires lots of effort, and it can be stressful, especially when you don’t have a clear picture of your small business budget. Setting a limit or planning your expenses will streamline your financial management.

But, how do you plan your costs before you incur them? Your small business budget is the key to estimating your expenses and considering that as a benchmark to plan further expenses for your business.

The article explains all you need to know about a small business budget, why it is essential for your business, and a six-step guide that will help you create your business budget efficiently.

So, let’s begin with understanding the business budget.

Table of Contents

What is a Business Budget?

Why is small business budget important.

• Create a Powerful Budget for Small Business

Stay on Top of Your Business Budgeting

Your business budget is est the income you will generate and the expenses you will incur for the next financial year. It considers how much you have spent in the past year or months and how much you will need to spend in the coming months to generate revenue.

However, you won’t have historical data if you have just started your new business. Hence, you have to estimate your expenses based on how much revenue you are targeting for the next financial year and how much costs you will need to incur to generate the revenue.

So, why do you need a business budget? Let’s understand its importance and see why you should have a small business budget.

• Helps in business planning: Your business budget will help you in your business planning and streamline your business finances more effectively.
• Helps in estimating profits or losses: It will also help you understand how much revenue you will generate and how many expenditures you have to make. Based on the predictions, you will know whether you will make a profit or loss in that financial year.
• Effective decision-making: The budget will also serve your purpose of making better decisions as you will have an estimate of how much you will spend and earn, so you will be in a better place to make business decisions.
• Raise funds: A substantial business budget will also help raise funds, since you must show future financial roadmaps to potential investors.

Hence, be it your business planning or raising funds, your business budget will gauge you a fair idea of the financial health of your business.

Let’s understand the comprehensive guide on creating a budget in six simple steps.

6 Steps to Creating a Powerful Budget for Small Businesses

Although creating a small business budget is not rocket science, you must estimate your expenses carefully and predict your revenue.

The business budget becomes challenging when you prepare your budget for the first time with no past figures. Below is a six-step guide that will help you prepare your small business budget, whether you are preparing it for the first time or not.

1. Calculate and List Your Revenue

To prepare a budget , you should start with the income side of the income statement , and you need to estimate your revenue for the next financial year. If you are selling multiple products or providing services, you need to list how much income you will generate from each product and service.

For example, suppose you expect to sell 10,000 units of wooden chairs in a year. In that case, you can consider the total revenue of the 10,000 chairs for the next financial year as revenue before deducting any expenses from the income.

Because if you deduct expenses from the income, it will give you profit or loss; hence, you are required to consider only total business revenue from various sources.

2. Club Your Fixed Costs Together

Your fixed costs remain fixed no matter how much revenue you generate or how many products you sell. These expenses are predictable and include annual rental expenses, loan repayment amount, depreciation costs, insurance expenses, etc.

To estimate your fixed costs for your business budget, you need to list all fixed costs that you will incur in the next financial year. Different businesses will have different types of fixed costs; for example, if you are in the manufacturing business , your fixed costs will include the following costs:

• Factory rent
• Direct wages
• Direct material costs
• Factory electricity
• Depreciation of the plant and machinery
• Factory insurance

Thus, it would help if you considered fixed costs applicable to your business, as it varies depending on your industry.

3. Add Variable Costs

Your business will have many variable costs , which are not fixed. The variable costs are those expenses that will differ depending on how many units you produce or how your business performs.

For example, the fuel expense of your business vehicle is a variable cost because it will vary depending upon its usage. Thus, these are the costs that change every month.

You need to add your variable business costs to your fixed costs to estimate total expenses for your business.

4. Predict any Contingent or One-Time Expense

Your one-time expenses may include buying an office or machinery for your business. The contingent expenses are those that you are unsure of their occurrence. These expenses may incur due to the occurrence or non-occurrence of an event.

For example, you expected your machinery maintenance costs would be $900, but you had extremely high costs on machinery ($2000) as you faced a machinery breakdown that year.

Now, you can not predict such expenses, but must prepare certain funds to meet costs during unexceptional circumstances.

5. Create Your Profit and Loss Statement

Once you have gathered all your business revenue, fixed costs, and variable costs, including contingent expenses, you need to prepare a profit and loss statement that will help you understand how much profit or loss you will make in the next financial year.

You need to add all incomes and deduct all costs from your estimated income. You may have a positive or negative amount as a result. If you get a positive amount, you will make a profit per your business budget.

And, if you get a negative amount, your budgeted revenue and costs will incur a loss for you. Moreover, you can’t stick to your budget 100%, but it will give you an idea of whether you are going in the right direction or not.

6. Prepare a Business Budget

That’s it. Now you are ready with your business budget. You just need to prepare a budget table, as shown in the example below, and you will have your small business budget ready to help you plan your business activities more efficiently.

Business Budget Template

Thus, the template shows how much this business will make revenue from the sales of products A and B and how much fixed, variable, and one-time expenses this business will incur.

If you are still, confused about how to create a budget, then you can leverage the best business budgeting software , and make the budget super smoothly.

Thus, creating a small business budget may seem stressful when you have a lot of other work to focus on. However, with the right approach, you can make your business budget efficient and make it work for your business planning and better decision-making.

Automate preparing your small business budget with Upmterics , where you will get customized business budget templates to suit your industry. The financial forecasting and business planning software can do all the business finance management for you.

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About the Author

Rudri is a passionate financial content writer and a Chartered Accountant by profession. She enjoys sharing knowledge through her writing skills in finance, investments, banking, and taxation while also exploring graphic designing for her own content.

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Business Plan Budget Example: Everything You Need to Know

A business plan budget example is smart to have when managing a company. 3 min read updated on February 01, 2023

A business plan budget example is smart to have when managing a company. It sets the outline for how much money you'll spend in your business and what you'll spend it on. This isn't a forecast, however, which is where you predict the future of your budget. A budget is the assumed plan for the future's outcome.

Is Budget and Business Planning Required for Small Businesses?

New owners of small businesses can run their company in a way that's more relaxed and not find it necessary to set a budget. However, it is a smart idea to have a plan for the future of your business and fund those plans. The best way to control your money is by budgeting, which lets you invest in any potential new business opportunities when it's appropriate. If you find your company grows, you won't always be able to interact with it as much and be hands-on with the daily operations.

You might need to split the budget up into different sections such as production, sales, and marketing. It's common for money to begin in a variety of directions through the organization. Budgets are an essential tool to help you control how much you're spending.

Benefits of Business Budget Planning

There are many benefits to creating a business budget . These include being better at the following:

• Planning for the future.
• Improving decision-making.
• Monitoring performance.
• Effectively managing money.
• Giving out the right resources to projects.
• Meeting your objectives.
• Solving problems before they become bigger.
• Increasing staff motivation.

How to Draft a Business Budget Plan

The key to having success in a business is to form, monitor, and manage your budget. This will help you designate resources where you need them so your company stays successful and profitable. The process doesn't necessarily need to be complicated, as you'll just need to figure out how much you think you'll earn and make in your budget period. You can start by asking yourself what the project sales might be for your budget period. It's better to be realistic and not overestimate, as this will cause issues in the future.

You'll also need to think about any direct costs of sales. This includes the costs of materials, subcontractors, and components to make your product or supply your service. The overhead costs or fixed costs also need to be included in the business budget. You can break these down by the cost of the premises, which include municipal taxes, monthly rent, and service charges. The staff costs also need to be taken into consideration, which includes benefits, wages, insurance, and pension plans.

Utilities are another expense to budget for , which include lighting, heating, and telephone costs. If you'll be printing or shipping anything, you'll have to factor in costs for postage, stationery, and printing. There may be costs for promotion, advertising, vehicles, equipment, and subsistence and travel expenses. The exact expenses your company will have will vary, and it's best to budget for each department. Make sure to include how much you'll pay yourself and a tax allowance. There are many costs to consider that you probably haven't thought about, which is why creating a business plan for your budget is important.

Once you have an estimate of how much you'll make and how much you'll spend, you'll be able to figure out exactly how much profit you're making. This lets you look at the budget you just made and see where costs can be cut. If you think you'll have problems with cash flow, you may need to rethink the budget and cut out entire departments.

Once you've created this budget, it's important to stick it as closely as possible. You should review it on a continuous basis and revise it if you need to, however. Many businesses have a rolling budget so they're constantly budgeting for the next year.

It's crucial to be realistic when it comes to your budget projects. If you're unsure if they're accurate, it 's better to be conservative and underestimate the revenue while overestimating the expenses. This can be hard if you're just starting a company, as you may not know exactly how much you'll need to spend on items and services.

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A How-To Guide for Creating a Business Budget

Creating a business budget allows businessmen to find whether their business will have enough revenue to pay off expenses in the future. A perfect budget acts as a root map for a company to ensure that they are proper and are on track with the budget.

A business budget helps firms manage their money efficiently. Preparing a budget to track actual revenue and spending throughout the accounting year helps gain greater control over the expenses. It helps everyone in an organization to work according to a proper plan and manage the expenses of the company.

What is a Business Budget?

A business budget is a detailed plan that states where the company will spend its money. Preparing a budget will allow the company to weigh down its expenses and benefits before committing assets . It also gives the business an idea as to how its future will look like.

Typically a business budget is prepared on an annual basis. But, if required it can also be prepared monthly or quarterly. It is a detailed plan which outlines how, when, and where you are planning to spend your money. A business budget helps the business to keep its costs under control and grow according to the plans.

Creating a perfect business budget helps firms eliminate their wasteful spending, develop plans to expand revenue, and work towards setting productive goals. Proper planning must include an outline of changes that a firm needs to make, potential changes of the market and clients, changes in the competition, operational changes if any, financial performance, investment details, etc.

Purpose of Business Budget

A good business budget serves as a benchmark for the firm to make sure that they are on track with its goals. It is an important instrument that can activate change. A budget can help to ensure the long-term success of your business. Certain points make it a necessity. The purposes of a business budget are as follows:

Forecasting the Earnings of a Business:

Creating a good business budget helps to estimate how much money the business will be able to make in the future as revenue, sales, and profit.

Plan the Expenditure:

Budget acts as a way to assign each job to the business spending so that there will be no unnecessary reason to spend money. Each penny spent will have a reason that eliminates wastage of money.

Holds Yourselves Accountable for Fluctuations:

A budget lets you evaluate the money planned to be spent with the actual money used. This helps you see if you are meeting the desired goals and have achieved the forecasted expectations.

Helps Prepare for Emergencies:

You never know what will come up during the life of a business and so it is always important to plan for the uncertainties in the business. A business budget can help you set aside some money to be used at the time of emergencies.

Attracts Investors Towards the Business:

Investors will need to see how their money will be used in a company. A well-prepared budget will show how a business is organized and committed. This helps the investors to analyze whether their money is used properly.

Helps to Allocate Resources:

Allocating business resources is one of the most critical purposes of preparing a budget . Therefore, it is important to differentiate between needs and wants. Budget planning can help to allocate new funds, reallocate existing funds, or change policies, practices, and priorities.

Steps to Create a Business Budget

Having a realistic business budget can act as a tool to help businesses to minimize cost issues, improve focus, and help efficiently use cash. Before focusing on the preparation of the budget, identify which aspects of the business needs improvement. This helps to decide how the business funds must be used. Based on this setup long and short-term goals are practical and purely based on the capacity of the firm to spend and save. Below are some steps that will help you get an idea of how to create a business budget.

Find Out the Sources of Income:

Do not overestimate the revenue this will lead to borrowing more cash to meet the operational needs of the company. It is better to refer previously recorded revenue of the company this will help to keep things realistic. Find out how much and from where the money is coming into the business. It is made on a monthly, quarterly, or yearly basis. Examine how your monthly income is fluctuating over time and look for seasonal patterns if any. A better idea about these changes will help you prepare for the bad income months by keeping small balances for emergencies.

Determine the Fixed Costs:

After finding out the incomes, it is time to get a hold on the costs of the business. For this start with the fixed costs. Fixed costs are those costs that do not change over time. For example, rent, salaries, tax rates, insurance policies, interest expenses, etc. Review these expenses and see which of them have stayed the same for each of the months. Add all the fixed costs together to get the total fixed costs that are incurred in the business.

Find Out the Variable Costs:

Variable costs are those costs that do not remain fixed and keep on changing month after month. These are the expenses that change in proportion to the production, output, sales, or usage. For example, owner’s salary, office supplies, piece-rate labor wages, commission, etc. When the business is having higher profits than expected then spend more on variables that will help scale up the business. On the other hand, when the profit is lesser than expected, consider cutting the variable costs until the business profit starts increasing.

Calculate One-Time Spends:

One-time spending is those expenses that come into a business without any notice. For example, expenditures incurred to rectify security breaches of computers in an IT company. These arise when you least expect them, and usually, businesses do not have money to settle these expenses. To prevent the fear of unexpected costs make sure to keep some extra money ready with you, this amount of money acts as a financial cover and protects your business from sudden and large financial burdens.

Bring Together All the Above 4 Stages Above:

After gathering all the required information regarding the incomes and expenses of the business, the next step is to create a forward-looking budget. A good budget balances a firm’s total income against its total expenses. For this purpose add all the fixed costs, variable costs, and one-time costs together. Then deduct the total from the total income. This will help to determine the overall profitability of the company.

Importance of a Business Budget

Creating a perfect business budget helps firms to understand how much income they have gained and how much did they spend. It also, helps the firms get an idea about the amount of money they will need in the future. An efficient budget can help businesses to make important decisions like cutting down unwanted expenses, hiring new staff members, purchasing new equipment, etc.

A business budget is a basis for the success of an organization. The following points will help you understand that a budget is an important element of the business.

• Controls finances of a business by estimating revenue, planning the expenditure, and restricting any unwanted spending
• Helps plan short-term and long-term goals for the growth of an organization
• It helps to know the financial health of the business
• It allows developing strategic plans for business expansions. Assists in preparing income, sales, and payroll taxes
• Attract people to invest in your company as a budget helps showcase where the money will be invested
• By having well-organized budgeted information, you can create accurate financial records

Different Types of Business Budgets

The final budget of a business is typically a blend of inputs from different other budgets developed at departmental levels. Below are the types of business budgets prepared by a company for its smooth functioning.

Master Budget

The master budget refers to a collection of lower-level budgets and is created by different organizational levels in a company. Management makes use of the budget to plan activities that are needed to achieve organizational goals. This budget uses data from cash forecasts, financial statements , and financial plans.

Operating Budget

An operating budget is an in-depth forecast of all expenses and revenues that a firm expects to get over a while. Firms usually formulate an operating budget at the end of the year to show expected activities during the subsequent year. It consists of fixed, variable, capital, and non-operating expenses. This information from this budget can be used to ensure whether the firm’s spending is according to the plans.

Cash Budget

A cash flow budget is an estimation of all cash receipts and payments that are anticipated to arise during a certain period. The estimates are made on a monthly, bimonthly, or quarterly basis. This budget is used to evaluate whether the company has required cash to continue its functioning throughout a given time frame. It helps determine the efficient allocation of cash.

Financial Budget

A financial budget refers to determining how much capital a firm will need to attain its long-term and short-term goals. The purpose of preparing a financial budget is to estimate the company’s cash, capital expenditures, and balance sheet items, including assets, liabilities, and owner’s equity. It gives an overall idea of the health and stability of your business.

Labor Budget

Businesses can find out how much it will cost to achieve the required goods production or service goals, both in financial and actual labor terms. Whenever a company is, planning to hire a new employee, they should consider creating a labor budget to determine how many laborers are required to achieve certain production levels.

Static Budget

Refers to a budget that incorporates the values of inputs and outputs that are conceived. It does not change throughout an accounting year. Usually prepared by nonprofit, educational, or government organizations who allocate a fixed sum to be used to undertake their activities. This budget is used to meet goals irrespective of any sales increase or decrease.

How Can Deskera Help You With Accounting of Your Expenses?

To make accounting of your business and expenses a hassle-free process, you should use Deskera Books . Deskera Books is online accounting software that will make your processes of financial reporting , budgeting and auditing easier, faster, and more efficient.

Deskera Books also comes with pre-configured tax codes, accounting rules, and charts of accounts. This will make sure you do not miss out on the benefits from tax-deductible expenses. Additionally, it will keep track of all your expenses and keep your financial statements and financial KPIs updated in real-time.

Lastly, you can even make your bookkeepers or accountants, or CPAs a part of your Deskera Books account by giving them access through an invitation link.

Key Takeaways

A business budget is a detailed plan which states where the company spends its money. These are detailed plans outlining how, when, and where you spend the business income and are prepared on a monthly, quarterly, or yearly basis.

Purpose of business budget:

An efficient budget acts as a road map for the business and helps gain control over its expenses. Below are some points that make it a necessity.

• Forecast earnings of the business
• Plan business expenditure
• Help businesses prepare for emergencies
• Attract investors towards the company
• Helps to allocate resources

Steps to create a business budget:

Business budget acts as a tool to help businesses minimize cost issues, improve focus, and help efficiently use cash. Before focusing on the preparation of the budget, identify which aspects of the business needs improvement. It helps decide how business funds should be utilized. The steps are as follows:

• Finding out the sources of income of the company
• Determine fixed costs of the business
• Finding out variable costs
• Calculate one-time spending of the firm, if any
• Bring together all the incomes and expenses identified in the above 4 stages

Importance of a business budget:

Creating a perfect business budget will help firms understand how much income they have gained and how much they spend. It is a basis for every company’s success. Below are some of the points why a firm must prepare a budget.

• Helps to plan and control the finances of the firm
• Control unwanted spending
• It Helps set group objectives towards which the business needs to work
• It helps in strategic planning
• Attracts investors to invest in the firm
• It creates accurate financial records
• Helps in strategic planning
• Creates accurate financial records

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How to Create a Business Budget

Last Updated: November 18, 2021 Approved

This article was co-authored by Samantha Gorelick, CFP® . Samantha Gorelick is a Lead Financial Planner at Brunch & Budget, a financial planning and coaching organization. Samantha has over 6 years of experience in the financial services industry, and has held the Certified Financial Planner™ designation since 2017. Samantha specializes in personal finance, working with clients to understand their money personality while teaching them how to build their credit, manage cash flow, and accomplish their goals. wikiHow marks an article as reader-approved once it receives enough positive feedback. In this case, several readers have written to tell us that this article was helpful to them, earning it our reader-approved status. This article has been viewed 180,937 times.

Building a realistic budget is an effective way to help keep your business profitable. To create your budget, you'll need to make a revenue forecast, estimate your costs, and leave enough room for a reasonable profit margin. Don't worry though—it's easier than it sounds. Our how-to guide will walk you through the simple steps of creating your own financial plan, even if you're a total beginner to budgeting!

Understand the Basics of Budgeting

• For example, assume your business is planning for next year. A budget will outline your estimated revenues, and then include a plan for expenses that is less than those revenues, so that you can earn a profit.
• A balanced budget means your revenues are equal to your expenses. A surplus means your revenues exceed expenses, and a deficit means expenses exceed revenues. As a business, your budget should always strive to be in a surplus state.

• A budget should guide every single business expenditure. For example, if you realize midway through a year that your business desperately needs updated computers, you can consult your budget to see how much estimated surplus revenue you will generate for the remainder of the year. You can then explore costs for computer upgrades and see if that fits within the surplus figure while allowing you to earn a profit, or alternatively, if you have the additional revenue to support taking out a loan for the computers.

• Sales: Sales refer to how much total money your business brings in from all sources. A budget will involve an estimate or forecast of your future sales.
• Total costs: Total costs are what it costs your business to generate your sales. These include fixed costs (like rent), variable costs (like materials used to make your products), and semi-variable costs (like salaries).
• Profits: Profits are equal to revenues minus total costs. Since profit is the goal of business, your budget should include expenses that are low enough to earn you a decent return on your investment.

Forecasting Revenue

• Remember that revenue forecasts are rarely accurate. The point is to provide the best possible estimate using the knowledge you have. [6] X Research source
• Always be conservative. This means assume you will receive sales volumes and pricing on the low end of the possible range.

• For example, assume you are opening a therapy practice. Therapists in your region may charge $100 to $200 per hour. Compare your qualifications, experience, and service offerings to your competition, and estimate your price. You may decide $100 is wise.
• If you offer multiple products and services, make sure to research prices for those too.

• Do you have any customers or contracts lined up? If so, include these. You can then assume referrals from customers and advertising will add to these volumes over the year.
• Compare to existing businesses. If you have colleagues who have established businesses, ask them what their volumes were like early on. For a therapy practice, your colleagues may tell you during their first year they averaged about 10 client hours a week.
• Look at what drives sales volumes. If you are opening a therapy practice, for example, your reputation, referrals, and advertising will bring in people. You could decide that based on these resources, one new client every two weeks is reasonable. You could then go further and make an estimate that each client will pay for one hour a week, and last for an average of six months.
• Once again, remember that revenue forecasts are purely estimates.

• Look at pricing. Do you have reason to believe your prices will increase or decrease?
• Look at volume. Are more people going to be purchasing your product or service? If your business has been growing by 2% annually, you can assume the same for the following year if no significant changes have occurred. If you plan on aggressively advertising, you could bump that up to 3%.
• Look at the market. Is your market growing? For example, imagine that you run a coffee shop in a downtown neighborhood. You may be aware that the neighborhood is rapidly growing due to new people moving in. This could be reason to add to your growth forecast.

Creating the Budget

• Contact an accountant if you are having difficulties. Chartered Professional Accountants in the UK and Certified Public Accountants (CPAs) in the US are trained to advise businesses in the area of budgeting, and for a fee they can assist you in any aspect of the budget creation process.
• A simple online search of "business budget template" can yield thousands of results. You can even find custom templates for your particular type of business.

• Research online or ask a financial adviser what the typical margins for your kind of business should be.
• If 10% is typical for your business, you know that if you are forecasting $100,000 of revenues, your expenses should equal no more than $90,000.

• Add up all these costs to get an idea of your fixed costs for the next year.
• If you have past financial data, use these fixed costs and adjust them for any rent increases, bill increases, or new costs.

• This will vary depending on how much you sell, which is why it is known as a variable cost. You can use your revenue forecast to determine this. For example, if you estimate you will sell 12 cars in your first year, your inventory costs will be the cost to purchase 12 cars.

• Add up all your estimated semi-variable costs.

• Are your total costs less than your revenues?
• Do your total costs provide a profit margin greater than or equal to your target?
• If the answer to either of these questions are no, you will need to look into making cuts. To do this, look at all your costs, and examine what you can do without. Labor costs are one of the most flexible areas to find savings (though you risk upsetting your employees when you cut hours). You can also look into finding a location with lower rents, or reducing utilities costs.

Expert Q&A

You Might Also Like

• ↑ Samantha Gorelick, CFP®. Financial Planner. Expert Interview. 6 May 2020.
• ↑ http://www.investopedia.com/terms/b/budget.asp
• ↑ http://www.inc.com/encyclopedia/businessbudget.html
• ↑ http://www.entrepreneur.com/article/76418
• ↑ http://articles.bplans.com/how-to-forecast-sales/
• ↑ http://www.investopedia.com/terms/s/semivariablecost.asp

About This Article

To create a business budget, start by forecasting your yearly expenditures. To do this, add together fixed costs like rent, insurance, and property taxes. Then, add variable costs like inventory purchases and semi-variable costs like internet packages or employee salaries. Compare this number to your forecasted yearly revenue, which you can determine by comparing to last year’s revenue, or if you’re a new business, by doing market research to figure out what similar businesses make in a year. If your revenue is lower than your expenditures, figure out places you can cut from your budget. To learn how market forecasting can help give you an accurate estimate, keep reading! Did this summary help you? Yes No

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How to Prepare a Budget for an Organization: 4 Steps

• 16 Nov 2021

An organization’s budget dictates how it leverages capital to work toward goals. For this reason, the ability to prepare a budget is one of the most crucial skills for any business leader —whether a current or aspiring entrepreneur, executive, functional lead, or manager.

Before preparing your first organizational budget, it’s important to understand what goes into a budget and the key steps involved in creating one.

What Is a Budget?

A budget is a document businesses use to track income and expenses in a detailed enough way to make operational decisions.

Budgets are typically forward-looking in nature. Income is based on projections and estimates for the periods they cover, as are expenses. For this reason, organizations often create both short- (monthly or quarterly) and long-term (annual) budgets, where the short-term budget is regularly adjusted to ensure the long-term budget stays on track.

Access your free e-book today.

Most organizations also prepare what’s known as an “actual budget” or “actual report” to compare estimates against reality following the period covered by the budget. This allows an organization to understand where it went wrong in the budgeting process and adjust estimates moving forward.

Budget vs. Cash Flow Statement

If the definition above sounds similar to a cash flow statement , you’re right: Your organization’s budget and cash flow statement are similar in that they both monitor the flow of money into and out of your business. Yet, they differ in key ways.

First, a budget typically offers more granular details about how money is spent than a cash flow statement does. This provides greater context for making tactical business decisions, such as considering where to trim business expenses.

Related: The Beginner’s Guide to Reading & Understanding Financial Statements

Second, a budget is, quite literally, a tool used to direct work done within an organization. The cash flow statement plays a different role by offering a higher-level overview of how money moves into, throughout, and out of an organization.

Instead of thinking of the two documents as competing, view them as complementary, with each playing a role in driving your business’s performance.

Steps to Prepare a Budget for Your Organization

The steps below can be followed whether creating a budget for a project, initiative, department, or entire organization.

1. Understand Your Organization’s Goals

Before you compile your budget, it’s important to have a firm understanding of the goals your organization is working toward in the period covered by it. By understanding those goals, you can prepare a budget that aligns with and facilitates them.

Related: The Advantages of Data-Driven Decision-Making

For example, consider a business that regularly experiences year-over-year revenue growth that’s offset by rising expenses. That organization might benefit from focusing efforts on better controlling expenses during the budgeting process.

Alternatively, consider a company launching a new product or service. The company may invest more heavily in the fledgling business line to grow it. With this goal, the company may need to trim expenses or growth initiatives elsewhere in its budget.

2. Estimate Your Income for the Period Covered by the Budget

To allocate funds for business expenses, you first need to determine your income and cash flow for the period to the best of your ability.

Depending on the nature of your organization, this can be a simple or complicated process. For example, a business that sells products or services to known clients locked in with contracts will likely have an easier time estimating income than a business that depends on active sales activity. In the second case, it would be important to reference historical sales and marketing data to understand whether the market is changing in a way that might cause you to miss or exceed historical trends.

Related: How to Read & Understand an Income Statement

Beyond income from sales activity, you should include other income sources, such as returns on investments, asset sales, and bond or share offerings.

3. Identify Your Expenses

Once you understand your projected income for the period, you need to estimate your expenses. This process involves three main categories: fixed costs, variable expenses, and one-time expenses.

Fixed costs are any expenses that remain constant over time and don’t dramatically vary from week to week or month to month. In many cases, those expenses are locked in by some form of contract, making it easy to anticipate and account for them. This category usually includes expenses related to overhead, such as rent payments and utilities. Phone, data, and software subscriptions can also fall into this category, along with debt payments. Any expense that’s regular and expected should be included.

Related: 6 Budgeting Tips for Managers

Variable expenses are those your business incurs, which vary over time depending on several factors, including sales activities. Your shipping and distribution costs, for example, are likely to be higher during a period when you sell more product than one when you sell less product. Likewise, utilities such as water, gas, and electricity will be higher during periods of increased use. This is especially true for businesses that manufacture their own products. Sales commissions, materials costs, and labor costs are other examples of variable expenses.

Both fixed expenses and variable expenses are recurring in nature, making it easy to account for them (even if variable expenses must be projected). One-time expenses , also called “one-time spends,” don’t recur and happen more rarely. Purchasing equipment or facilities, developing a new product or service, hiring a consultant, and handling a security breach are all examples of one-time expenses. Understanding major initiatives—and what it will take to accomplish them—and what you’ve spent in previous years on similar expenses can help account for them in your budget, even if you’re unsure of their exact values.

4. Determine Your Budget Surplus or Deficit

After you’ve accounted for all your income and expenses, you can apply them to your budget. This is where you determine whether you have enough projected income to cover all your expenses.

If you have more than enough income to cover your expenses, you have a budget surplus. Knowing this, you should determine how to use additional funds best. You may, for example, move the money into a rainy day fund you can access should your actual income fall short of projections. Alternatively, you may deploy the funds to grow your business.

On the other hand, if your expenses exceed your income, you have a budget deficit. At this point, you must identify the best path forward to close the gap. Can you bring in additional funds by selling more aggressively? Can you lower your fixed or variable expenses? Would you consider selling bonds or shares of company stock to infuse the business with additional capital?

An Important Financial Statement

The person responsible for generating a budget varies depending on an organization’s nature and its budgetary goals. An entrepreneur or small business owner, for example, is likely to prepare an organizational budget on their own. Meanwhile, a larger organization may rely on a member of the accounting department to generate a budget for the entire business. Individual department heads or functional leads might also be called on to submit budget proposals for their teams.

With this in mind, anyone who aspires to start their own business or move into an organizational leadership position can benefit from learning how to prepare a budget.

Do you want to take your career to the next level? Consider enrolling in our eight-week Financial Accounting course or three-course Credential of Readiness (CORe) program to learn financial concepts that can enable you to unlock critical insights into business performance and potential. Not sure which course is right for you? Download our free flowchart .

About the Author

Can a Small Business Consultant Help You Run Your Business?

7 min. read

Updated April 10, 2024

There comes a point in every business when the owner realizes they need advice and wonders, “Should I hire a consultant?”

And, as with most things in life, the answer is, “It depends.”

Whether you’re starting a new company or growing an existing business, hiring the right consultant can be a cost-effective way for your small business to leverage specialized knowledge. Conversely, hiring the wrong consultant can cost you more than money—it can cost you a lot of wasted time and energy.

So, the challenge for a small business owner is to understand the role of a consultant in their business, and to learn how and when it is cost-effective to hire one.

• What does a small business consultant do?

A business consultant is simply an outside expert you hire to solve an internal business problem. A good consultant is a great source of specialized knowledge. A great consultant brings knowledge, skills, experience, and process to improve the client’s condition.

Unlike in-house employees, consultants have independent schedules, may have multiple clients, and are hired on a contract/project basis. Depending on the consulting firm, consultants may work alone or may bring their own team, which typically includes one project manager and two analysts.

TIP: It is always important to clarify who the primary contact person will be in order to prevent miscommunications.  

A consultant can help with marketing and sales development, business expansion and improvements, and even execution of their ideas and recommendations.

The following is a quick snapshot of the consulting process:

• Pre-consulting : Prior to beginning work,  you and your expert set out the terms, parameters, and agree on the “consulting agreement”.
• Consulting period : The consulting period typically includes a discover, research, and final presentation of recommendations that completes the project.
• Post-consulting :  You and the consultant may choose to extend your agreement or move towards implementation on your own.
• Why do people hire small business consultants?

Small business owners hire consultants as a cost-effective way to bridge a gap in knowledge and skills within their company, or a as a way to bring a fresh, objective, and professional perspective to the company.

Here are the three most common reasons why our clients turn to consultants for help:

• To find the problem(s) : In many cases, a business may be exhibiting problematic “symptoms”, such as a decrease in sales, or cash-flow issues, and internal management in unable to pinpoint the source of the problem. In this case, a consultant can come in observe the symptoms within your operations, conduct some tests and research, and determine the root of the problem.
• To create the solution(s) : In some cases, you may have a goal that you can’t achieve internally either because there is a skills gap or because it is simply not within your company’s core competency. Hiring a good consultant can save time and money, and ultimately achieve a better result.
• Optimization : In some cases, your company may have grown very quickly and know there are lots of things you could be doing better, but you don’t even know where to start. A consultant can come in and bring in some fresh perspective, evaluate any or all areas of your business, and determine the processes and procedures to increase productivity levels.

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• Where to find consultants

Finding consultants—I think—is the easy part. You can always search online directories such as elance.com or ask for recommendations from friends or service providers like your accountant or lawyer.

Finding the right consultant is the hard part. This is why I cannot stress enough the importance of the “mutual consulting interview”. Whether you talk to your consultant in person or by phone, a live interaction will tell you more about that consultant than any website or review will. Trust your gut. Is the person excited about your business, and about working with you? Do you believe they can achieve what they say they can achieve in the timeframe they quoted?

Now, having said all this, even with the best intentions there may be some consulting relationships that end up just not working out. When that happens, it’s usually a mutual feeling. In other words, don’t feel bad for parting ways with a consultant if things aren’t working out—chances are, they know it’s for the best, too.

Consulting agreements/contracts

Contracts are typically for 3-6 months, with the option to renew the contract as necessary.

TIP: Design your consulting agreement in phases that give you natural stops in the workflow, so that you can part ways with your consultant amicably if it ends up being a bad match.

Setting the optimal time period for your project is important to ensure your consultant has enough time to provide results, and it is also helps to ensure timely progress.

A typical consulting contract includes consulting parameters, names of the responsible parties, payment schedules, and any relevant deliverables and deadlines.

• How much should you pay?

This is one of my favorite questions because the answer is quite simple:  Price is determined by value.

Giving you the statistics on fees alone is not very valuable to you when consulting fees can range from $150-$10,000 per hour and projects fees can range from $1,000-$250,000.

Consultants vs. contractors

Often I am asked, “What is the difference between a $30/hr powerpoint writer from Craigslist and hiring an MBA at $300/hr?” While I wish the difference were obvious, lately, with the the terms “consultant” and “contractor” being used pretty indiscriminately, there has been some confusion about which means what. The following chart outlines the underlying difference in the value of a “consultant” vs. the value of a “contractor”.

Understanding this key difference will not only help you get more out of your consultant but also help you have money by knowing when it is best to hire a “contractor”.

How to determine a budget

Ask yourself: How much is this worth to me? And: How much can I afford?

Here are three tips to help you determine the right budget:

• Look at percentages : A good way to determine the right budget for hiring a consultant is to set it as a fixed percentage of your total costs and/or sales. For example, if your monthly sales are $10,000, it is not wise to pay $5,000 per month to a consultant. On the other hand, if your monthly sales are $200,000, and you want that number to grow to $500,000, then $5,000 per month for a 6-month contract with a consultant sounds a lot more reasonable.
• Look at phases : If this is a complex project with a lot of uncertainties, look into reducing your risk by setting up in phases. For example, if you are looking to redesign your marketing efforts for several product lines, perhaps you should tackle each product line individually instead of all at once. This may not only lower the cost required to hire a consultant, but also reduce your overall need for a consultant—if you can learn from their approach to the first product line, you may be able to implement their strategies for the other product lines yourself.
• Talk to a consultant : Often a consultant can work with you for free to help you determine the right scope and budget for your project. Your preliminary discussions with a consultant are a great way to test the waters with your potential working relationship, too.
• Not all consultants are a good fit

A small business consultant  can  help you run your business, by planning your business strategy and in some cases even executing it. I’m a big believer in small business consulting, because I see the positive effects of it every single day!

But not all consultants are created equal, and not all businesses or business projects are created equal, either. You’ll need to consider why you’re thinking about hiring a consultant, and how long you’re willing to wait before you see results, and how much you can realistically afford to pay for their counsel. Then, you need to find a consultant that you really click with. When all of that comes together, you’ve positioned yourself for success.

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Mayra Ceja is the founder of Expertly Insights, a platform where business owners can talk to live business experts, on-demand. As a serial entrepreneur and a business coach, her passion is growing exciting, new/young companies by combining traditional strategy, great business culture, and a focus on nimble, customer-focused marketing.

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Newsom and Democratic lawmakers detail first California budget cuts totaling $17 billion

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California Gov. Gavin Newsom and leaders of the state Senate and Assembly announced an agreement Thursday to cut $17 billion from the state budget in April, providing the first details of their plan to begin to tackle the state’s massive deficit.

The plan calls for delaying $1 billion in grant funding for transit and intercity rail projects, saving $762.5 million by pausing hiring for open state jobs and pulling back $500 million from a program to help districts pay for K-12 building projects, among other proposals to trim the shortfall now, before additional cuts are made this summer.

“We are able to meet this challenge thanks to our responsible fiscal stewardship over the past years, including record budget reserves of close to $38 billion,” Newsom said in a statement. “There is still work to do as we finalize the budget and I look forward to the work ahead together to continue building the California of the future.”

The agreement marks a redo of a fumbled budget announcement made last month when Newsom and legislative leaders heralded a premature deal without disclosing an exact amount of funding they intended to cut or detailing a single program that would be affected.

Newsom and Democrats announce a plan to reduce the enormous budget deficit. How? TBD

Facing a shortfall of at least $38 billion, Gov. Gavin Newsom and legislative leaders said they have agreed to $12 billion to $18 billion in cuts but offered no details.

March 21, 2024

Lawmakers and the governor are scrambling to reduce California’s budget deficit, which Newsom estimated at $37.9 billion in January, before the fiscal forecast is updated in the coming weeks to likely show California in an even deeper budget hole. Estimates from the Legislative Analyst’s Office have suggested the deficit next year could be nearly twice as high as Newsom’s forecast.

Lower-than-expected revenues, delayed tax deadlines and overspending based on inaccurate budget projections created California’s grim financial picture. The state budget relies heavily on capital gains taxes paid by California’s highest earners, making state revenues subject to volatility in the stock market.

Republicans have criticized the lack of transparency into state budget negotiations and contend Democrats created the fiscal crisis by continuing to fund expensive programs, such as the expansion of Medi-Cal to all low-income immigrants, even as state revenues drop.

Assembly Republican Leader James Gallagher (R-Yuba City) called the budget deal “a swing and a miss from Democrats.”

“California’s budget has major league problems and Newsom is proposing JV solutions,” Gallagher said.

The first round of cuts could be voted on as early as next Thursday.

Democrats also agreed to pull $12.2 billion from state reserve accounts to cover the shortfall when the final budget is approved later on. The early cuts combined with the planned dip into the reserves will trim $29.5 billion off the deficit.

“We are all committed to delivering an on-time balanced budget, and this early action agreement is a critical first step to shrink the state’s shortfall,” said Senate President Pro Tem Mike McGuire (D-Healdsburg).

Because the shortfall this year is so large, Newsom has urged the Legislature to take “early action” to begin to whittle away at the deficit now, long before the June 15 deadline to pass a budget.

The cuts Democrats agreed to make this month are largely considered the easier choices, allowing them to focus on tougher deliberations that will come later on this spring. Reducing the deficit before Newsom unveils his revised budget proposal in May could also lessen the public perception of the state’s fiscal woes by trimming the deficit figure before it is expected to grow.

Voters say California’s budget deficit is an ‘extremely serious’ problem, poll finds

What do voters think about the governor and potential solutions to the state’s looming budget deficit?

Jan. 18, 2024

The struggle to reach a consensus up until this point foreshadows the difficult work ahead in May and June for a Legislature and governor with little experience leading through a fiscal crisis as they weigh challenging choices that affect millions of Californians.

The agreement announced Thursday largely mirrors a plan the Senate put forward weeks ago to “shrink the shortfall” by $17 billion, which aligned with many of Newsom’s proposals to begin to offset the deficit.

The Assembly, where Democrats hold 62 of 80 seats under a new speaker , took a little longer to reach a consensus. This week, the lower house said it pushed back on some of the governor’s proposed cuts to housing and homelessness programs, which were ultimately left out of the early action deal. At the Assembly’s urging, the agreement also authorizes the administration to pause one-time spending from prior budget years that has not yet been dispersed.

Assembly Speaker Robert Rivas (D-Hollister) said his chamber’s approach was the “right way to come at closing such a massive shortfall” and that he expects Newsom “to deliver challenging budget proposals next month to reduce the deficit in the long-term.”

The agreement, according to Newsom and legislative leaders, includes:

• Saving $762.5 million by declining to fill vacant state positions.
• Cutting $500 million from the School Facility Aid Program, which funds K-12 building projects.
• Delaying $1 billion in funding for the state’s Formula Transit and Intercity Rail Capital Program.
• Delaying $550 million for a grant program to build facilities to expand preschool, TK and full-day kindergarten.
• Paying state workers on July 1 instead of June 30 to push $1.6 billion in payments into subsequent budget years.

The full list is available here . More details of the plan will be revealed when lawmakers introduce bill language, possibly next week.

More to Read

Newsom called it a ‘gimmick.’ Now he’s using the trick to lower California’s massive deficit

Newsom cuts $2.9 billion from California climate programs, delays an additional $1.9 billion

Jan. 11, 2024

Column: Newsom’s budget plan reflects his rosy view of the economy

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Taryn Luna covers Gov. Gavin Newsom and California politics in Sacramento for the Los Angeles Times.

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Biden's latest student-loan forgiveness plan brings questions for borrowers: What to know

Some student loan borrowers may not take advantage of President Joe Biden's final plan to eliminate debt for millions because they don't know if they're eligible, don't understand the process or think it is a scam.

On Monday, Biden promised student loan relief by the fall with his final proposal. This plan comes less than a year after the Supreme Court blocked his initial attempt.

Under the proposed plan, more than 4 million borrowers who have been paying down their student loans for 20 years or more could have their debt completely canceled, according to the White House. The plan would also help more than 10 million borrowers by giving them $5,000 or more in relief, Biden's administration said.

Biden also aims to help 23 million borrowers by eliminating interest past the original loan amounts.

How to apply for student loan forgiveness?

If eligible for debt relief, borrowers should periodically check their emails for updates from their student loan servicers and Federal Student Aid .

Learn more: Best personal loans

While Biden works on his final proposal, eligible borrowers can apply on the Federal Student Aid website for other kinds of relief, including if they have a disability , work for a nonprofit , or are a teacher , government employee or medical professional .

Borrowers repaying their loans for 20 to 25 years can apply for income-driven repayment (IDR) loan forgiveness.

Several other loan forgiveness options are available on the Federal Student Aid website, but borrowers should check if they're eligible by looking closely at each selection. Victims of forgery, borrowers who declared bankruptcy and Perkins loan borrowers are examples of individuals eligible for forgiveness.

What document explains your rights and responsibilities as a federal student loan borrower?

A Master Promissory Note (MPN) is a binding legal document borrowers must sign before they receive a federal student loan promising they'll repay the loans and any accrued interest and fees to the U.S. Department of Education, according to Federal Student Aid.

Student loan debt: Averages and other statistics in 2024

There is one MPN for direct subsidized/unsubsidized loans and a different MPN for direct PLUS loans. All MPNs can be signed electronically.

"You may receive more than one loan under an MPN over a period of up to 10 years to pay for your or your child’s educational costs, as long as the school is authorized to use the MPN in this way and chooses to do so," the Federal Student Aid website says.

Am I eligible for student loan relief?

By checking their emails, borrowers typically receive messages explaining whether they're eligible for relief and what type they can apply for.

If not signed up for emails, borrowers can visit the Federal Student Aid website and check their eligibility by hovering over the "loan forgiveness" tab and clicking "types of loan forgiveness."

Once the borrower clicks "types of loan forgiveness," they will be taken to a page showing the available relief options. Borrowers then can check their eligibility.

Be aware of student loan scams

Federal Student Aid warns borrowers to be aware of scams because they "might be contacted by a company saying they will help you get loan discharge, forgiveness, cancellation, or debt relief for a fee."

"You never have to pay for help with your federal student aid," the office's website says. "Make sure you work only with the U.S. Department of Education, the office of Federal Student Aid, and our loan servicers, and never reveal your personal information or account password to anyone."

The emails to borrowers come from [email protected], [email protected] and [email protected].

Borrowers can report scam attempts to the Federal Trade Commission by calling 1-877-382-4357 or by visiting reportfraud.ftc.gov.

Student loan scam involving 'Mission Hills Federal'

The Federal Trade Commission announced March 13 that it is sending more than $4.1 million in refunds to 27,584 borrowers who "lost money to student loan debt relief scammers who lured consumers with fake loan forgiveness claims and pocketed their money," according to a news release.

The scheme, which "tricked students into paying hundreds to thousands of dollars" since 2014, went by many names including Mission Hills Federal, Federal Direct Group, National Secure Processing and The Student Loan Group.

The group made the borrowers pay "illegal upfront fees and pretended to lower consumers’ monthly student loan payments," according to the FTC. The operators also deceived borrowers into sending their monthly student loan payments directly to them by "falsely claiming to take over the servicing of the consumers’ loans," the agency said.

"In reality, few payments were actually applied to consumers’ student loans and in many cases, none at all," the FTC said. "Instead, the defendants kept consumers’ money for themselves."

Money latest: The age when the average Briton pays off their mortgage revealed

The average Briton is 61 when they pay off their mortgage - a drop of two years. Meanwhile, Spotify is raising prices again. Read about this and the rest of today's consumer and personal finance news in the Money blog, and leave a comment in the form below.

Thursday 11 April 2024 19:56, UK

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• Spotify to hike subscription price by up to £24 a year
• Minimum income for family visa rises by £10,000
• Italy mourns 'end of Italian waiters in London' as visa rule brought in
• Wendy's creating 400 jobs as part of UK expansion
• The age when the average Briton pays off their mortgage
• 'WTF is going on with the price of olive oil?'
• Could I build a home gym for less than my gym membership?
• Basically...  Tax codes
• Cheap Eats : Great British Menu legend shares ultimate toastie recipe

Ask a question or make a comment

Fake flights and caravans are the two most common items being sold by fraudsters in relation to travel, Lloyds Bank's research has found.

As Britons head online to book deals for the upcoming bank holidays and summer, they have been urged to "remain vigilant", with the average holiday scam victim being conned out of £765.

Amid rising flight costs post-COVID, people have been flocking to social media and other lesser-known websites to secure cheaper deals.

A food delivery company claims to have created an  "unshakeable bag" to avoid spillage in transit.

Bolt, which owns the Bolt Food delivery platform, said its design is based on gyroscope technology and will keep food stable "during the most abrupt movements".

In a post to its website, the firm said it would make the design available to its competitors as it is "too powerful to be owned by any one company".

"We believe everyone should enjoy a perfect meal, regardless of which app they order it from," it said.

Assaulting a shopworker is to be made a separate criminal offence after a government U-turn following pressure from campaigners.

The government previously said "more legislative change" was not needed to tackle the "intolerable violence and abuse" faced by shopworkers, arguing it did not think it was "required or will be most effective".

But Rishi Sunak is now set to announce his government will be amending the Criminal Justice Bill to bring in the new offence.

The drugmaker was on its knees when Sir Pascal Soriot took over in 2012. 

But under his leadership it now does just about everything the UK wants from a business - creating high value-added jobs and developing products that improve people's lives.

The FTSE 100's performance has lagged that of many of its peers, both in the United States and Europe, more or less since the Brexit vote in 2016.

That poor performance has reflected the poor valuation of many UK-listed companies - resulting in numerous foreign takeovers of UK businesses in recent months and years.

It has also led to a scarcity in the number of companies floating on the London Stock Exchange, most notably the  Cambridge-based chip designer ARM Holdings , which last year opted to list in the US instead.

The situation has alarmed the government, which has announced a number of reforms  aimed at raising the UK's attractiveness .

An imminent shareholder vote on Sir Pascal's pay makes a particularly interesting test case because few would dispute that he has been the most outstanding FTSE 100 chief executive of his generation.

This rise could take his potential earnings to £18.5m this year - which critics say is excessive.

Read my full piece here ...

England's average house price has risen by £103,000 over the last decade, while the average annual wage has risen by £7,734.

But some areas have seen homeownership affordability decline more than others... 

The London borough of Barking and Dagenham has seen the most significant fall, according to moving platform Getamover. 

The platform found the area has seen house prices more than double to £380,000 in the last 10 years - but wages have only risen by £2,182. 

Hillingdon in West London took the second spot, with the average property shooting up by £230,000 to £495,000, while the average income increased by just £143. 

While London remains the most unaffordable region, the East Midlands has also seen a notable fall. 

Oadby and Wigston in Leicestershire ranked fifth in the table, with the average house price increasing by £129,000 and the median annual income growing by £2,644.   

Gedling ranks sixth among the areas of England where the affordability of buying a home has declined most. 

The Nottinghamshire region has seen house prices soar by 84.8% to £231,000, while the average income has risen by just 13.11% to £33,454. 

You can see how other areas fared in the table below...

Rishi Sunak's post-Brexit rules for foreign workers are getting tough press in Italy this week - with claims they could mark the end of Italian waiters in London.

April saw the minimum salary requirement for a skilled worker visa increase from £26,200 to £38,700 - a near 50% rise as the government tries to reduce immigration.

Italian daily newspaper La Repubblica published an article on its site headlined "Italians in London, the long goodbye" after the new rule was brought in this month.

There were an estimated 342,000 Italians living in the UK in 2021, according to the latest Office for National Statistics census data.

La Repubblica said the new rule change would lead to the "end of the story" of Italy's "ancient roots" in the capital, which was founded by the Romans in 43 AD.

Separately, Italian journalist Antonio Polito wrote in the Corriere della Sera newspaper that the new salary for skilled workers was "an amount that no young novice can realistically earn".

"Thus London gives up one of its great assets, the fact of being an offshore and cosmopolitan city," he said.

Mr Sunak's post-Brexit rule change has worried hospitality bosses who are still struggling to get to grips with a post-COVID reality and rising costs. 

Conor Sheridan, founder of Nory and Mad Egg restaurant chain, previously told the Money blog that roughly 14% of his 15,000 UK employee base were on working visas that could be affected.

Trade body UKHospitality also said the changes would "further shrink the talent pool that the entire economy will be recruiting from".

As the migration law came in, Home Secretary James Cleverly said it was "time to turn off the taps and end the flow of cheap workers from abroad".

"We are refocusing our immigration system to prioritise the brightest and best who have the skills our economy needs, while reducing overall numbers," he said.

Several of the UK's biggest supermarkets closed their gender pay gap in the last year - while Morrisons saw the biggest rise, figures show.

Ocado and Lidl reduced their gap by the largest amounts in 2023-24 compared to the previous year, while Tesco, Asda, Aldi, Co-op, Iceland and Waitrose owner John Lewis also saw a reduction.

The data comes from the government's gender pay gap service and states the difference in hourly rates of pay. 

In contrast to other big-name brands, Morrisons saw its mean pay gap widen to 12.5% from 7.6%. M&S also saw a slight increase from 12.5% to 12.6%.

The mean figure gives the best overall view of the gender pay gap but includes extreme values which could skew the average.

Of the 11 biggest UK supermarkets, Co-op has the largest pay gap with 13.2%, followed by M&S and Morrisons.

An M&S spokesperson said: "We're committed to driving equal opportunities and making M&S a great place to work for women. Encouragingly our median pay gap has decreased, and women now make up more than 50% of our UK store management population, but we know there is more to do. 

"We're making progress with the launch of new initiatives, talent programmes, and policies, including our flexible working offer – Worklife, a Job Share Finder, and our industry-leading family leave offer."

A spokesperson for Co-op said: "We are committed to treating our colleague member owners fairly, and this includes driving equitable outcomes for female colleagues. We've seen a significant reduction in our gender pay gap since we started to report data in 2017, and this year's data shows further progress towards closing it.

"It's important to reiterate that we don't pay people differently based on their gender at Co-op. The gender pay gap is caused by us having fewer females in leadership role, where salaries are higher.

"Our focus on improving representation remains, as we know this is one of the key drivers causing the gender pay gap. Today, 40% of our leadership population are female - this is not enough, which is why we’ve launched a series of development programmes and have a coaching and mentoring offer to support women with career progression.

"We know there’s still much to do in this space and will hold ourselves to account and continue to strive for gender equality."

Morrisons has also been contacted for comment.

Every Thursday we look at a different savings option, explain the pros and cons, and reveal the best deals on the market (see table below for that).  This week we're talking about the best notice accounts. Savings Champion founder Anna Bowes  says this...

As with the rest of the savings market, the top notice account rates have started to fall. However, there are stalwarts like the Investec 90-day notice account that are holding steady and as a result offering savers an opportunity to earn a little more, while not having to tie up their cash for too long.

A relatively unused aspect of the savings market, notice accounts offer a bit of a halfway house, with the best rates available generally paying more than the top easy access rates, but will more flexibility of access than a fixed term bond.

Just as it sounds, these savings accounts require you to give notice in order to access your money without a penalty. The usual notice period ranges from 30 to 120 days, although there are some accounts on the market that require six months or even a year's notice.

By Sarah Taaffe-Maguire , business reporter

Another record month for Heathrow. Last month was the busiest ever March for the UK's biggest airport, the second record-breaking month in a row. 

It was also the busiest Easter weekend as Good Friday became the busiest ever direct departure day, when 118,000 people began their journey at the airport. 

It shows, despite cost of living pressures, lots of Britons were going on holiday.

More good news for Heathrow came earlier this week as planned strike action by 600 border force officers was called off to allow for negotiations in its dispute over working patterns. 

Oil prices are still high, hanging around $90. A barrel of Brent crude oil, the benchmark for oil prices, costs $90.66. The last time prices were this high was in the wake of the 7 October attacks and fears of conflict spreading throughout the Middle East. 

On the currency front, £1 buys $1.2538 and €1.1678.

How old is the average Briton when they buy their first home, or finish paying their mortgage, or retire?

These are some of the questions answered in a "Journeying Through Life" data dump from the Office for National Statistics.

Here are some of the key takeaways...

Home ownership - including the one life event that's happening earlier

People are buying homes later in life, perhaps unsurprisingly given how house prices have risen in the last decade or so.

In 2022, more than half of people owned their own home (either with a mortgage or outright) by the age of 36. 

That's a significant increase on 2004's figures - which showed the average age for home ownership was 32. 

This graph shows what proportion of people own homes at what age.

It isn't all doom and gloom on the homes front, however, with the age at which people own their home outright (ie mortgage paid off) dropping from 63 (in 2004) to 61 in 2020. 

This is pretty much the only life event happening earlier, however.

Retiring later

Again, this probably won't come as a huge surprise, but people are retiring later. 

The age where more than half of people were retired increased from 64 in 2011 to 66 in 2021. ​

There has been a bigger increase in average retirement age for women (from 61 years in 2011, to 66 years in 2021) than for men (from 65 in 2011 to 66 in 2021). 

The ONS says this is because the state pension age for women was increased from 60 to 66 during this time to match men.

Gender pay gap shrinking but still present

The latest data shows that men are still, on the whole, being paid more than women - although the gender pay gap is shown to be shrinking. 

For all employees, the gender pay gap was 14% in 2023 - compared with 20% in 2013.

Despite the gap shrinking, this graph shows that men's hourly wages are higher than women's at nearly all ages. 

The grey shaded area represents the pay gap. 

Another part of the data shows that males start work a touch earlier than women - with half of males in full-time employment by the age of 23 (compared with females at 24) in 2021. 

That data could be explained by the fact that more women attend university - some 319,000 females compared with 285,000 males in 2022.  

Moving out, marrying and having children

The age at which young people move out of their family homes is increasing, too.

In 2011, half of people were not living with their parents at the age of 21 - compared with 24 in 2022. 

More men live with their parents than women, with 61% of adults living at home in 2021 were male.

When it comes to having children, the average age at which women have their first baby has risen to 29.

That's up from an average of just 23 in 1970. 

And finally, marriage.

The median age at first marriage has been steadily increasing since the 1960s. 

For opposite sex couples married in 2020, the median age was 32 years for men and 30 years for women. For those entering into same-sex marriage, the median age was older, at 36 years for men and 32 years for women.

As well as getting married older, fewer people are getting married. In 2019, marriage rates had fallen to their lowest on record. For men, there were 18.6 marriages per 1,000 never-married men; for women, there were 17.2 marriages per 1,000 never-married women.

Spotify has announced it is hiking its subscription prices by up to £24 a year.

It is the second time in less than a year that the music streaming giant has increased its prices.

Here's how the prices will change...

Individual: £11.99 a month (up from £10.99 a month)  

Duo: £16.99 a month (up from £14.99 a month)  

Family: £19.99 a month (up from £17.99 a month) 

When will the change kick in?

The subscription price will change from May and if you are an existing customer Spotify will email you and give you one-month's notice of the change.

If you are on a free trial you will pay the old price for one month once your trial ends.

A Spotify spokesperson told Sky News: "So that we can keep innovating and delivering value to fans, the music industry, and creators on our platform, we occasionally update our prices. 

"We've begun communicating with existing subscribers in the UK to explain what this means for their account."

American burger chain Wendy's will be recruiting for over 400 job roles as part of its expansion across the UK.

The chain returned to the UK in 2021 after a 20-year break and has since opened just over 30 sites, including drive-throughs in Colchester, Peterborough, Derby and Brampton Hut.

But the chain, which was founded in Columbus, Ohio, in 1969, plans to open a further nine sites this year in Liverpool, Middlesbrough, and a second location in Sheffield.

New locations will include Liverpool, Middlesbrough and a second site in Sheffield.

Wendy's franchisee GH Burgers will open a first restaurant in Wood Green, London, this year.

There will also be restaurants in Southend-on-Sea, Colchester, Cambridge and Newcastle.

Michael Clarke, UK managing director for the Wendy's Company, told The Caterer : "We've seen great momentum in building Wendy's fandom in the UK, and the love and excitement for this iconic brand grows stronger with each new restaurant opening."

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These 100+ N.J. school districts could get back money lost in budget cuts under new plan

• Published: Apr. 09, 2024, 6:45 a.m.
• Tina Kelley | NJ Advance Media for NJ.com

Additional state aid could be available to more than 100 New Jersey school districts facing budget cuts , under a plan moving through the state Legislature.

The legislation, A4161 , would provide an additional $71.4 million to soften some of the cuts in Gov. Phil Murphy ’s proposed state budget. The legislation to add additional school aid was approved by the state Assembly Education Committee Friday. (See the full list of N.J. districts facing state aid cuts below.)

Murphy introduced his $11.6 billion state budget proposal for 2024-25 in February. If approved by the state Legislature, it would be the first state budget to fully implement the controversial 2008 school aid formula that cut aid to many districts.

Stories by Tina Kelley

• This N.J. high school is in the running for $100K science prize
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• N.J. professor wins $1M Turing prize for helping teach computers ‘randomness’

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