How do you prepare a budget for your business
Hi clients have often asked me how they should go about putting together a budget for their business. So there’s a few simple steps that you can take, the first thing you need to do is to gather together financial information for last year, so you can see what your sales and what your costs were for last year, you then need to look at your goals for this year, and what you hope to achieve in terms of sales and expenditure. So when we’re looking at sales, are you going to be increasing your prices? How much new business are you going to get? Are you going to lose any existing customers? So you’ve got to think carefully about what your projected sales are. You then need to look at your costs in order to achieve those sales. Are there going to be any additional costs incurred to achieve those sales? Are your costs going to be in line with last year? Is anything going to go up? Can you reduce any of the costs? So all of these things need to be considered once you’ve considered your anticipated income and expenditure. And you’ve put the figures onto a spreadsheet to see what your budget looks like. You will need to actually review that on a regular basis throughout the year because things do change and you need to make sure that your budget for the coming year is up to date as possible as you progress through the year and you actually need to monitor your actual results against that budget to make sure that you stay on track. Of course, if you need any help producing a budget, it’s always a good idea to have a chat with your accountant.
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