Creating a Simple Budget

This month we wrap up our three-month series on planning for the new year with a process for creating a simple budget. Below you'll also find a link to last year’s article on preparing for year-end financial tasks.
 
Many entrepreneurs—whether you work in the world of small business or nonprofits—are overwhelmed and intimidated when faced with the prospect of taking a deep dive into business financials. You spend all of your time and energy creating products and experiences, marketing, managing employees, serving clients and customers, tracking your daily income and expenses...the list goes on and on. But there’s nothing quite like creating a budget to help you reach your business goals. 

Create a Business Budget in Five Simple Steps: (from the Fresh Books Blog)

1. Tally Income Sources: start with figures from your profit & loss reports
2. Determine Fixed Costs: these are expenses that are the same each month, like rent or mortgage, phone and internet, web hosting, etc.
3. Include Variable Expenses: these typically can be scaled up or down, depending need and cash flow. An example might be advertising.
4. Predict One-Time Expenses: these might include capital improvements, investments in technology or equipment, or trainings and certifications
5. Put It All Together. Click here for a free template with example from QuickBooks.

Remember, a budget is not set in stone, it's simply a tool to help you make thoughtful decisions. Undoubtedly things will change and evolve over the course of the year. But it is a very helpful exercise, and taken together with the goal setting you've done, your marketing plan, your annual plan, and some good bookkeeping reports, you'll be empowered to grow and thrive in 2018 and beyond!

Do you see the value but feel overwhelmed by the thought of creating a budget for next year? Contact Clarity for help. We're your partner in designing financial health.