Use this small business budget template to track and manage your business’s finances. Easily track and view monthly income and expenses to calculate total profits. The completed budget will help you gauge how close you are to reaching your financial goals. A small business budget template is a reliable tool that enables you to calculate expenses, revenue, and profits to see how close you are to reaching your organization’s financial goals. You can also use a template to factor in unexpected costs and revenue to determine which expenditures to trim in order to keep the company’s profitability on track. In short, a small business budget reveals additional opportunities and possible revenue streams.
We believe everyone should be able to make financial decisions with confidence. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team. Perhaps you’re working out of your home, but plan on renting or buying a building for your business in the next year or two. Before completing your budget, you might want to consider your long-term goals.
Small business budgeting templates
That includes all the money you spend — from A/B testing your marketing campaigns to your monthly office rent. 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. Don’t be afraid to shop around for new suppliers or to save money on other services being performed for your business.
Just choose the correct fiscal year, click on the “Add Budget” button, and start entering budget details. Your computer crashes and needs to be repaired, or worse, replaced. Whether in our personal lives or in business, we need to factor in variable expenses. A static budget, unlike a flexible budget, is a fixed budget that remains unaltered regardless of changes in factors such as sales volume or revenue. A plumbing supply company, for example, might have a static budget in place each year for warehousing and storage, regardless of how much inventory it moves in and out due to increased or decreased sales.
Why You Need a Small Business Budget Template
It helps you determine the workforce you will require to achieve your goals so you can plan the payroll for all of those employees. In addition to planning regular staffing, it also helps you allocate expenses for seasonal workers. Businesses draft this budget to understand how much capital they’ll need and at what times for fulfilling short-term and long-term needs. It factors in assets, liabilities, and stakeholder’s equity—the important components of a balance sheet, which give you an overall idea of your business health.
- In your spreadsheet, create a summary page with a row for each of the budget categories above.
- Harvard Business School Online’s Business Insights Blog provides the career insights you need to achieve your goals and gain confidence in your business skills.
- 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.
- Then, the software calculates figures like gross profit, net operating income and net income for you.
- Included on this page, you’ll find many useful small business budget templates, including a simple small business budget template and a business budget template.
From there, you can customize a rough budget for your own industry. 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. These are startup costs like moving offices, equipment, furniture, and software, as well as other costs related to launch and research.
How to Prepare a Budget for an Organization: 4 Steps
Xero also allows you to compare any created budget to actual totals, to see how far under or over budget your company is. Not every accounting software application offers budgeting capability, but the following small business accounting software applications do. Yes, if your business grows, your revenue will increase, but so will your overhead, as you increase advertising, add employees, and pay additional taxes. So when planning for business growth, be sure to factor in your increased expenses as well. The ideal situation is to prepare your budget details in your accounting software application. For instance, you may need to hire a temp if your office manager becomes unexpectedly ill.
Her expertise is in personal finance and investing, and real estate. 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. When teams have clarity into the work getting done, there’s no telling how much more they can accomplish in the same amount of time.
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. Since it is difficult to predict these expenses, there is no certain way to estimate for them. But it’s wise to set aside some cash for this category to stay prepared. After you’ve researched this information, you should then match the business’s revenue with expenses. The goal is to figure out what an average weekly expense for overhead, utilities, labor, raw materials, etc. would look like.
Steps to Prepare a Budget for Your Organization
Once you’ve identified your business’s fixed costs, you’ll subtract those from your income and move to the next step. Then, you can use those historic numbers and trends to make revenue projections for future months. Your revenue is the money generated by sales before expenses are deducted. Notice how your business’s monthly income changes over time and try to look for seasonal patterns. Your business might experience a slump after the holidays, for example, or during the summer months. Understanding these seasonal changes will help you prepare for the leaner months and give you time to build a financial cushion.
In that case, you can use Microsoft Excel or similar spreadsheet software to prepare your budget. Profit is what you take home after deducting your expenses from your revenue. 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. You enter your revenue in one specific tab and expenses in another. Then, like magic, the spreadsheet uses the data in the income and expense tabs to summarize the information.
As time goes on, regularly compare your actual numbers to your budget to determine whether your business is meeting those goals, and course correct if necessary. Although you might be tempted to spend surplus income on variable expenses, it’s smart to establish an emergency fund instead, if possible. That way, you’ll be ready when equipment breaks down and needs replacing, or if you have to quickly replace inventory that’s damaged unexpectedly.