How to budget and forecast for your business

Some businesses open their doors without a clear plan, a budget and a sales forecast to help them get where they want to go. In this blog post, today we will go through a list of questions to get you started as well as tips on how to forecast a budget.

Start off by noting that a budget should be a guide, not a constraint and it allows you to use your resources where they’re most needed, so you can lead in the right flow.

Creating a budget doesn’t have to be a complicated task. To get you started, keep the following questions in mind:

• How much will you charge for your goods or services?
• How much will it cost to produce your product?
• How much are your operating expenses? (rent, water & electricity, employees, maintenance costs, etc.)
• Do you need to hire new employees?
• What are your sales targets?
• How much will you pay yourself?
• Do you have any new project for your business? (new products, planned refurbishments, moving shop location, etc.)
• Will you need a mew loan to run a specific new project? What’s the loan re-payment?

The main aim is to establish how much you’ll spend and earn in any given timeframe, and then use those figures to project and forecast. Remember, creating a financial plan lets you control your business’s cash flow instead of it controlling you.

So ultimately what’s important is to:

1. Collect any past and current business figures.
2. Perform a preliminary analysis.
3. Establish revenue expectations.
4. Establish projected expenses.
5. Create a contingency plan.

If you would like assistance on budgeting and forecasting for your business, please contact one of our directors Mr Conrad Meli on cmeli@accountingservices.com.mt. Meanwhile, more information can be accessed here.

Original article published here: https://fairwindsmanagement.net/how-to-budget-and-forecast-for-your-business