Once your business is operational its essential to plan and tightly manage its financial performance.
Creating a Budget is the most crucial plan for any organisation and often the most difficult in the early days. A good Budget will become your blueprint for sucess, and the basis for further contingency planning.
You need to cover the basics:
- Revenue Projections
- Direct Expenses CoGS
- Operating Expenses
Try not to guess, do some research and planning!
A Sales plan will inform Revenue Projections and if the research is accurate your Cost of Goods Sold figures should also flow from this plan.
Overheads will depend on your commitments. Overheads are all non-labour Expenses required to operate your business. Then consider any other Operating Expenses. Will you be outsourcing tasks, hiring professional services, employing staff?
Then plug in your figures to a spreadsheet and see how much money you’ll be making. Calculate your break even point. Perhaps the cold figures might prompt some changes in your plans.
What if these figures change? How does that impact your budget and the bottom line?
I recommend calculating some budget variations so you have a handle on what the best case and worse case positions are and importantly how you will react.
Let us help you develop your budget so that you too can start from a position of strength and certainty. Click Here