A fresh take on the budget (no, really)

buying a business.jpgBudget budget budget. There’s no getting away from it.So instead of debating the rights and wrongs of Darling and Osborne and Brown and Cameron, the woes and foes and yes-and-nos of the political moves du jour, as everyone else everywhere is, we thought we’d give you some useful, fresh advice to do with budgeting.Here’s a little introduction on how to write your own 12-month budget for your business.

  • Your budget is made up of three basic elements: projected cashflow, costs and revenues
  • 12-month budgets work best when they’ve been drawn up on a month-by-month basis
  • Work out predicted cashflow, costs and revenues for each month for the year ahead
  • As a rule of thumb, halve what you expect your revenues to be and double your anticipated costs – it’s best to be on the safe side
  • Once you’ve made your first draft, find ways to reduce costs
  • Figure out any periods where cashflow might be a bit sticky and work out how to avoid problems – working out how much you need to save from times when your revenues are higher, for example
  • Consult an accountant or anyone you know who has financial experience
  • Refer to your budget frequently – at least monthly – and measure your progress
  • Revise it if and as often as necessary
  • Many successful businesses use a rolling budget that always plans the next 12 months – aim for this

There you go, you’ll be filling Darling’s shoes in no time. (Or Osborne’s, depending which camp you’re in.)

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