This post was originally published on On Deck
Creating a small business budget is an essential step that can help small business owners take control of their finances, make informed business decisions and set the stage for growth. However, creating an effective budgeting process for your business can feel overwhelming.
Luckily, business budgeting doesn’t have to be as complicated as it seems. With a simple step-by-step approach, you can create a budget to reach your business’s financial goals and set yourself up for long-term growth and success.
How to create a business budget. Step 1. Calculate business revenue.
You can begin creating a business budget by calculating your business’s monthly revenue. Be sure to include all streams of income. Ideally, you should do this for the past 12 months. This can help you identify patterns and see how your revenue fluctuates throughout the year due to seasonal trends, market conditions and other factors.
This is a key step to creating an effective budget. By having a detailed understanding of your revenue by calendar month, you can better evaluate your business’s financial health and forecast your future income. Completing this step means you’re already half-way toward having a business budget to help you set realistic and effective business goals.
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