Have A Manageable Sized Budget – Monthly Budgets Are Good

Budgeting is something to consider; it gives you a working document to look at and a roadmap for where you want to see your business. Budgets are static documents, they can be adjusted as needed by using forecasts. Forecast looks at the current economic environment, actuals from prior months and make an estimate of where to next.

Consider the following;

• Your budget should at least be a 12 month budget. You can then break your budget into quarters.
• Most businesses use the calendar year (January – December) as their business year.
• Compare each month’s actual results to your budget and find out what is causing your differences (variances).
• For example, if your actual results for revenue (sales) was over or under budget, what contributed to this variance?
• Review your marketing plan to ensure it is helping you to achieve your budgeted goals.

Moment of Truth: An operating budget (profit and loss) is done in advance of your operating year.