Budgets and Income projections
“Have you got a Budget?” “Have you done your Budget?” “Can we have your Budget? “
As a business owner you hear these words quite often, especially if you are talking to a bank manager and have to lodge an application to borrow some money.
So the questions are, how to create a Budget and why do we need it?
Creating a budget can be a peculiar process as you have not started your business yet or it is only early days, but they want you to have twelve months projections. And your internal self say: “I do not know what will happen in the future”
How to create a Budget? Make it up, based on the information you have, based on what you think will happen, start adding some figures up and it will shape up. Most likely, you ran some scenarios on a piece of paper at home or, maybe, like some of us, have it all in your head… keeping you awake at night.
Interestingly, once you put it on the piece of paper, you have a Plan, you have some targets to meet and now these are material, have deadlines and measurable tasks and also there is a person that is responsible for all of it… congratulations – It’s you!
The Format can be quite simple being: Income, Less Expenses, the difference is Profit. Often, if you are looking at borrowing, you maybe starting trading with No profit, or even a small Loss.
Once the initial set up expenditure has happened, the business should break even and later, will become profitable.
Give it a go yourself or you can get in touch with us on 07-575-3790.