Sample Business Budget Template to Estimate Income and Expenses

A good budget can help you maximize profit for your company

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Creating a budget for your business helps focus efforts and financial resources to your company's most important goals. You'll concentrate on sales targets when creating the revenue portion of your budget and think through each cost for the expenses, whether it will vary from last year, if you can cut the expense this year, and many other questions. 

How to Use Your Business Budget

Your business will reap the benefits of budgeting if you update the budget monthly, using your expenses and income from the prior month as your guide, while also keeping in mind your firm's financial goals or targets for the year.

Additionally, work with your senior staff to see if they have information on upcoming issues that could impact the budgeted sales and expenses, either positively or negatively. This enables you to adjust your budget and financial expectations as you go.

Your company's monthly budget review may indicate where efforts to meet business targets have been successful. For example, if you switch health insurance carriers to obtain lower-cost coverage, you can see how that change has affected your bottom line month over month, and year over year, as well.

A monthly business budget review can also help you spot potential problems. For example, if you have a retail business, you may realize you need to ramp up your advertising spending more in the fall to take advantage of the holiday shopping season. Or if you've made changes that could have tax implications for your company, you may need to increase your budgeted accountant fees expense in anticipation of the extra accounting work required to work through the implications.

The following worksheet lays out the income statement line items you can use to set up a basic business budget. Depending on your particular business type, you may have to include additional types of income or expenses, but this worksheet should give you the general idea of the types of items you should include in your business budget.

Basic Business Budget Worksheet

 
CATEGORYBUDGET AMOUNTACTUAL AMOUNTDIFFERENCE
Sales Revenue   
Interest Income   
Investment Income   
Other Income   
TOTAL INCOME   
EXPENSES   
Accounting Services   
Advertising   
Bank Service Charges   
Credit Card Fees   
Delivery Charges   
Deposits for Utilities   
Estimated Taxes   
Health Insurance   
Hiring Costs   
Installation / Repair of Equipment   
Interest on Debt   
Inventory Purchases   
Legal Expenses   
Licenses/Permits   
Loan Payments   
Office Supplies   
Payroll   
Payroll Taxes   
Printing   
Professional Fees   
Rent/Lease Payments   
Retirement Contributions   
Subscriptions and Dues   
Utilities and Telephone   
Vehicle Expenses   
Other   
Other   
TOTAL EXPENSES   
TOTAL INCOME MINUS TOTAL EXPENSES   

 

Why Write a Business Budget at All?

If your business is small, you may wonder why you need a budget. After all, you most likely have a pretty good idea of your monthly cash flow and expenses. This may be even truer if your business is well-established, with a cash flow pattern that's quite similar year over year.

However, even if this is the case for your business, consider at least drafting a basic budget, like the one on this worksheet. Even the best-established business can run into problems with its supply chain, or face a sudden, unexpected expense like a substantial rent increase.

Having a budget in place, even if it's a rudimentary one that you update only once per year, can still help you plan for those eventualities and ride them out when they happen. It also might reveal additional areas where you could shave costs to increase your profits. Using Excel Spreadsheets.