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A budget is an estimate of your income and expenditure over a set period of time. It takes into consideration your long-term financial goals and future predicted transactions.
This is then compared to your actual income and expenditure to highlight bad spending habits and areas which need improvement, but also allows you to make sound, thought out future business decisions.
Preparing and keeping on top of a business budget is essential if you want to maximise profits.
Budgeting is tricky for start-ups - you rarely have an existing model to work from. Do your due diligence by researching industry benchmarks for salaries, rent and marketing costs.
Ask your network what you can expect to pay for professional fees, benefits, and equipment. Set aside a portion of your budget for advisors – that’s accountants, solicitors, that kind of thing.
Since you don’t have any historic financial data to review, make sure to use projected costs. For example, if you have signed a lease for office space, use the monthly rent you will pay moving forward.
Your budget is your planned revenue and spending. It allows you to plan for the future and review your excess spending. Consider preparing a budget monthly, quarterly, or annually.
Cashflow forecasts are typically more frequent, often monthly, and focus on the cash ins and outs for your business. A cashflow forecast predicts future trends and gives a realistic idea of when your business is going to require a cash injection to avoid problems.
Both budgeting and cashflow forecasting are important forecasting tools for business. They can help you keep on top of your bills and can also prove useful if you are trying to get finance (it shows lenders you can pay them back).
Not at all! The best budgets are simple and flexible, and they therefore come in all shapes and sizes.
The key is on focusing the budget to your business as this allows you to channel in on what is important to you and what actionable changes you need to make to achieve your financial goals.
Putting in the work to create your budget may seem like a hassle, but whilst it will take a bit of time and energy at first, it is worth the extra effort in the long run.
Thorough business budgeting gives you the financial insights you need to make the right decisions for your business to grow, scale, and prosper in the future.
Our expertise spans a wide range of industries, with 60% of our client base concentrated in the following core sectors:
Consultants, agencies, engineers, and other specialised firms providing expert professional services.
SaaS companies, crypto businesses, software development firms, and tech start-ups.
Manufacturers, supply chain operators, warehousing businesses, and logistics providers.
While we specialise in these areas, our diverse client portfolio includes businesses across various industries, from retail to construction and manufacturing to hospitality.
No matter your sector, we’re equipped to support your growth and success.
