How to Make a Business Budgeting Worksheet

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A budget is essential for a startup entrepreneur to set goals and evaluate the viability of a business idea. It's also a critical management toll and bellwether for the financial health of a company, identifying new investment opportunities, and measuring progress. In short, no business should be without a working budget.

A budget is the world's oldest management tool. Every business needs to have a budget. Here's a business budgeting worksheet you can use as an example. Too many business owners make up a budget every year or every quarter or every month and then, they stick it in a drawer and forget about it. Budgets only help your small business if you use them. Sometimes, it's hard to make a budget work to suit your business needs. Follow these steps and it will be easier, but it requires commitment and stick-to-it-iveness.

How to Make Your Small Business Budget Work

  • Learn to be flexible. Especially when you first start developing business budgets, remember that you are new to this. Like anything else, you have a lot to learn. Learning comes with experience. If, at first, your revenue doesn't match your expenses, then adjust your expenses. In your first year of budgeting, you may have to make a lot of adjustments, but that's OK. The second year will be much better.
  • When making your business budgeting worksheet or budget spreadsheet. Make conservative estimates. Underestimate your revenue and overestimate your expenses, particularly at first. If you do this, and your budget estimates are a little off, you've already taken it into account.
  • Budget in a cash emergency fund. Try to set aside a portion of each month's revenue and put it in some sort of savings account, like a money market fund. Even though your budget will be tight, you will be glad you did this if there is a sudden economic downturn or a big bill suddenly crops up.
  • Go over your budget every month. Budgets don't help if you stick them in a drawer. Even if you fear that you've gone over your budget, take a deep breath and look over your budget every single month. Look at how your revenue matched up. Look at where you went over and under your planned expenses. If your revenue was lower than your expenses, try to find some ways to cut costs.
  • Watch your cash flow. Cash flow problems kill many small businesses. Watch your cash flow on a monthly basis and be sure you are in positive cash flow territory. If you are not, you may have to take out a small bank loan one month. If so, be sure that in the coming months you can pay it back.
  • Show restraint but not rigidity. Your business budget should help restrain you from unnecessary spending. If something comes up, however, that is an expense and would be valuable to your business, don't ignore it because it isn't in your budget. Those are times you need to "bust" your budget to take advantage of valuable opportunities.