Creating a Simple Budget

This month we wrap up our three-month series on planning for 2018 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.

Year End Housekeeping

As 2016 comes to a close, it’s helpful to look ahead to the year-end financial tasks that January brings. If Clarity supports you with financial services, it is likely your representative has been gathering and entering this information into your system throughout the year. If, however, you have been in charge of your data, then this list should be a helpful guide for you to check your current information:

  • W2’s – Employee Information
    • Current Employee Addresses
    • All Employee Social Security #’s
  • 1099’s – All vendors who are not incorporated and who you have paid out $600.00 or more total for the year.
    • Current Vendor Addresses
    • All Vendor Tax ID#s
  • Begin reviewing your financial statements for year-end
  • Create a draft budget for 2017. If you don’t have a budget process in place Clarity would be happy to help you get squared away! Contact us for more information.

It's budget time!

Plan for budgets now!

As this year comes to a close I remember that endings always make me think about beginnings. They give me an opportunity to re-evaluate and to re-assess. I usually take this time of year to re-commit or newly commit the use of two of my available resources: time and money. I think about balance, I think about what I love and what I am missing. Then, I plan.

The process of planning always opens up a whole new world to me.


Everything is a possibility and there are endless paths to take. Where do I want to travel? How much time do I want to take off?   How much time will I devote to piano lessons? Will I be able to increase the charitable donations I make? Do my kids really need the latest/greatest tablet? (Year two on list to Santa...)

Sometimes taking that first step feels overwhelming... But, I do love the idea of spending the month of December in Mexico. (I could play piano there, seek out a children's center to support... )

Welcome to the world of budgeting! You have possibilities, you have priorities and you have resources to spend to get where you are going. While you may feel at a loss to figure out where to start or how to find joy and possibility in the process - it all begins with the first step and re-framing any past perceptions of the task.

Really taking on budgeting for your organization can be more than rinse and repeat. It's your opportunity to put your plans for the upcoming year into action. It is the time to take a good hard look at what is working and what isn't, whether there is balance and whether you are heading down the path you really want to go. Your data already tells that story (or it should, anyway). Building your budget is the process of creating the story you are planning to tell.

So, let's get started!

Step 1: Dedicate the time

  • Make an appointment (or several) with yourself on your calendar to work on creating budget
  • Give yourself a treat, a special blend of tea, conducive music (something to make you look forward to the time)

Step 2: Create or use a template

  • Your system may allow exporting of your data in the desired format
  • You can use paper or excel spreadsheets that can be edited for your business
  • Computer programs like Excel can give you the added benefit of tying variable amounts to assumptions to calculate 'what if' scenarios more easily
  • Your budget should cover 12 to 24 months of business operation

Step 3: Start where you are, with what you know (Income, expenses, loan payments)      

  • Pull together historical info about each category by month
  • Review the comparison of budget versus actual. Make changes in your new budget document as needed

Step 4: Add what you are planning (changes known or predicted)

  • Do you need new categories?
  • Are there uses of cash to consider (asset purchases, loan repayments, etc)

Step 5: Ask yourself some questions:

  • Are you in alignment with your organization goals?
  • Does this budget reflect what you value most?
  • Are there trends (industry or seasonal) you can learn from or incorporate?
  • Are your ratios in line with industry standards?

Step 6: Tweak it until your income and expenses balance (this is the tough one)

  • Revisit and scrutinize all categories (Income and Expenses)
  • Shop your fixed expenses annually to see if you can find a better deal (phone, insurance, leases, etc)
  • If you provide health benefits, consider HSA/HRA's Flexible Spending
  • Work to reduce or eliminate debt to lower interest expense
  • Try to keep enough cash on hand to take advantage of discounts or good deals
  • Build in some cushion

The power of your budget is immense. Your budget causes you to think through how your organization is planning to fulfill the work ahead. It puts those plans and changes into black and white, making them real, actionable. Having numbers attached to your plans helps us put those visions and plans into action by giving us something to measure against as we begin to make progress.

Are you feeling inspired to do it right now? Good for you - go get 'em! If you feel like you need a little more to get going, or some further technical assistance, contact us –


Tina Flores-McCleese is the owner of Clarity, a firm providing financial consulting, workshops, one on one training, and grant management for non-profits and small businesses. Clarity helps non-profits and small businesses through organizational transitions with an eye towards the future, so your organization can accomplish what you really want to.
You can reach Clarity at 360-385-9963 x1, or