The end of any year is a frantic period individuals, families and business houses. End of year is quite often the time to travel for many, reflect and spend. For a business entity, it is a perfect time to gain profits but also critically plan ahead.
A budget is the perfect tool for this process. A budget provides you with an outline of your projected revenues and expenses for the coming year. Below are a few budgeting guidelines
Format with Microsoft – Microsoft website is always a good source of budget templates.These templates provide a solid base for starting budgeting process and how much information is needed.
Create a sales forecast – This is done by looking at how much you are going to sell next year. Start with your current customers and project what you can expect from them for next year, then evaluate your sales pipeline. Looking at how many new projects you close on a quarterly basis is a good way to forecast too.
Forecast your expenses – How much are you going to spend next year (i.e., equipment, supplies, wages)? Evaluate the list and mark those items that tend to vary with sales (i.e., payroll, marketing, etc.) and those that are fixed (i.e., rent, electricity, etc.).
Consider changes – It’s important to think about changes that will materially affect your results, e.g conferences or trips, capital purchases. You may also want to consider the validity of certain items and their impact on your growth as opposed to their cost.
The above tips if considered may prove to be some of the most profitable and valuable time spent on your business.