How to create a budget for your small business 👑

If the thought of creating a budget brings you to tears, we’ve got you covered😉. Let’s break it down with these 4 steps.

💸 Goals: You can’t create a budget without knowing what it is you are working towards and how you want your budget to work for you. You need to ask yourself: “How much do I want my business to grow?”, “How many sales do I want to make?”, “How much profit can I expect?

💸 Costs: We can all agree that running a business can get expensive. Create a spending plan that will help you keep track of where your money is going. There are two types of expenses to consider. Fixed expenses (which are amounts you need to pay regularly like rent, insurance and vehicle costs.) And variable expenses, which are difficult to predict but happen from time to time. Some examples of variable expenses could be interest rates increasing or changing your supplier.

💸 Income: This is the fun part where you predict how much money you think your business will make. It’s great to dream - but be realistic with your anticipated income. Overestimating could leave you with a deficit, while underestimating could make you miss out on necessary funds.

💸 Balancing: Once you know how much money is coming in and going out of your business it’s time for the moment of truth: Working out your budget surplus or deficit. A positive balance means you have a surplus, -and a negative balance means a deficit. If you’re in a deficit, don’t panic. This is an opportunity to re-evaluate your expenses and cut out unnecessary costs. To do this, use this calculation: your estimated income - your calculated expenses = Surplus or deficit.

So don’t waste any more time worrying! Give these steps a try and check out our new accounting solutions on iK Dashboard. Your budget champion era starts now👑!