A small business budget template can be as complex or as simple as you would like. With complexity comes greater understanding and control of your business, so it is always best to err on the side of too much data. The more you know about how your business operates fiscally, the better prepared you will be to handle financial issues.
My wife and I run separate small businesses, but we both work as freelance writers and therefore share our budgets. We prepare a small business budget template at the beginning of each year, then alter it as time goes on and situations change. We’ve found that the year-at-a-glance method works best to keep us focused.
You can prepare a small business budget template using a computer program or a paper ledger. We prefer the computer route because it’s easier to make changes, but we always print a few hard copies for our files. We use Excel spreadsheets, but you can also use a word-processing or accounting program if you prefer.
First Column: Cost Categories
The first column of your small business budget template should list all the costs your business incurs over the course of a year. Operating, advertising, marketing, personnel, and administrative costs should all be included.
For example, your budget template might include cost categories like office supplies, utilities, shipping, office staff salaries, sales staff salaries, insurance, employee benefits, taxes, legal expenses, membership dues, and maintenance. This is just a small sampling-you’ll probably have many more costs to consider.
Second Column: Budget
Create a second column in your small business budget template for the amount of money you can budget toward each of your cost categories. Some of these will be easy to estimate, while others might be more difficult.
When budgeting your utilities, for example, you can look over the past year of usage to estimate what they will cost you this year. Many utility companies offer two- or three-year usage charts for customer reference, and you can usually call to ask for that information if it isn’t included on your bill.
My tendency is always to over-estimate when I’m preparing my small business budget template, and my wife has to caution me. Your budget should reflect an accurate estimation of what you expect to spend; padding those estimates to make it easier to overspend will throw off your budget for the entire year. Use empirical data to make your estimates, then stick with those numbers.
Third Column: Actual Spending
Next in your small business budget template should be a column for the actual costs for each of your cost categories. This should be filled out at the end of each month, once you know what you actually spent.
Fourth Column: Difference
In the fourth column, you will record the difference (in dollars) between the budget and the actual spending for each cost category. For example, let’s say you budgeted $950 for utilities but you actually spent $875. The difference would be $75.
If you spent more than you budgeted, these numbers should be recorded in red and surrounded by parentheses. This represents a deficit in your budget. If you spent less than you budgeted, print those numbers in black with no parentheses to indicate a surplus in your budget.
Last Row: Totals
It isn’t enough to learn from your small business budget template how you fared in each cost category. You need to know how you did overall. So, below all your cost categories on the final row of your template, you’ll want to total all those numbers below each column.
You can use Excel formulas or similar functions in other programs to automatically calculate the data in your small business budget template. Otherwise, you will need to calculate by hand-and I recommend running the numbers at least twice to compensate for user error.
Now that your small business budget template is complete, remember to keep referring to it and adding data as the year goes on. After you’ve been in business for a few years, you might want to project two or three years of your budget to help keep your finances in line.