A budget is essentially an expectation of business results. Budgets can help you manage costs, determine how you operate your business, and keep you on track for future goals. You’ll want to begin with a baseline. If you have an established business, use data from previous years. If you are just starting out, use your business plan to forecast a budget.
Plan to do a monthly budget review. Before your first reporting period, estimate how much income you plan on receiving and how much you expect to pay out in expenses. Also consider any planned initiatives that may affect you financially. Then, at the end of the month, compare your estimates and numbers from past years with actual results. As time goes on and you get in the habit of budgeting, you’ll be able to make more informed decisions and quickly adjust for unexpected changes.