Smart budgeting comes down to a matter of knowing how best to keep it simple. There’s no formulaic secret – just balance what you are likely to earn with that which you are likely to spend during any given period of time. That’s it!
To help you get started with creating your budget, ask yourself these questions:
What are the projected sales during this time going to be?
What are the direct costs of sales (materials, components, etc.)?
What are the fixed costs (building rent, staff costs, utilities, production, vehicle expenses, equipment, etc.)?
Having answers to these questions will help provide you the numbers you need in order to create an effective and well-balanced budget. An important rule of thumb is to always include enough space in the budget to pay yourself and don’t forget taxes. You do not want to come up short in either case.
Make sure to record all of your budget’s successes and shortcomings for future reference. After all, there’s no sense in creating the budget in the first place if it’s not going to be used to help you move forward.
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