Budgeting doesn’t have to be a bad word. In fact, creating a budget can help you control your expenses before you are “in the thick of it.” Using a simple budget calculator like the one we have created makes the process a bit easier. Download your copy at the end of this post.
To be clear, our budget calculator is very simple and is only intended for illustrative purposes. If you need something more detailed or one that offers a more analytical approach, then please seek out professional legal and/or tax experts that can help you calculate scenarios for your specific situation.
When budgeting, you have a couple of different options. You could use specific dollar amounts to allocate to each category of expense or you could opt for a percentage of some base amount. In our Business Budget Helper, we are going to use Gross Profit as our base because gross profit is actually what you will have to work with.
In the blue highlighted fields you will enter your revenue (as a dollar amount), and then enter the percentage of discounts/refunds and cost of goods sold. This will calculate your gross profit.
From there, skip down to the Expenses section and begin entering the percentages that you are budgeting for each expense category. Bear in mind that if the total of your expense percentages exceeds 100% then you will be incurring a loss for the year!
As you enter information into the blue highlighted fields, your results (in dollars) will appear in the peach highlighted section to the right.
We hope that you enjoy playing out some different scenarios to help you create a better business budget.
If you would like additional information regarding ways to set your business up for success, please download our report, 5 Ways to Set Your Business Up for Success.
If you would like information about our online courses, please check out Bookkeeping Fundamentals.