Starting off the new year means creating a foundation of reality and adding dollop of good intentions!
One of the pieces of the foundation is your business budget. Most women business owners hate making a budget! They automatically think in terms of restrictions…a budget is your money on a diet. And whatever we’ve learned in the last few years, most of us are aware that our money needs to be on a diet!
However, a budget also represents possibility and good intentions. We are saying to ourselves, “I’m going to be a good steward of my money this year.” You intend to do what it takes to have more come in, keep more of what you earn and, when you spend, spend with intention. Money is energy–power if you will.
So what’s in a good budget?
- Projected gross income–what you think your business will earn.
- Cost of goods (if you sell products) or cost of subcontractors (if you sell services)
- Subtract cost of goods/subcontractors from gross income and you get Net Income Before Expenses
- Projected expenses such as: travel expense, auto, marketing expense, location expenses (rent, etc.), employee expenses, professional services such as bookkeepers and accountants, etc.
- Subtract expenses from Net Income Before Expenses and you have Net Income After Expenses.
- Estimate of your taxes
- Estimate of any other types of income such as rents paid to you, royalties from books, music, etc.
- Subtract taxes and add other income from your Net Income After Expenses and you get to Net Income.
Net Income is what you get to:
- Take Home
- Re-invest in your business
- Save
- Give away
- Use to create a better world
Any questions on budgets? Why do you do them? Or not do them as the case may be?
