5 Tips to Remember When Writing Your Budget

• Define your risks
  

Do you know what the potential financial risks are to your small business?  Sitting down and defining what risks your business could face is an important piece of budgeting information.
For instance, if you have employees and the minimum wage increased, that would impact your business and your budget.  A machinery or technical breakdown could also impact your bottom line in a big way.  Budget now for future possible needs.

• Overestimate your expenses
  

Things always cost more then we think they are going to.  Projects can run over time and therefore often over budget.  Budget slightly above your estimated line item costs, and if the project comes in under budget; so much the better!
If you are writing a monthly overhead budget use past expenses as a base and add a standard % increase for each line item.

• Budget for high and low periods
  

Every business has high and low periods of revenue throughout a year.  By forecasting and budgeting for your slow periods you will be able to cover the ongoing expenses of your business. 

• Plan for large purchases
  

Thinking of renovating your office or purchasing some new equipment?  Building these larger purchases into your budget will help you to avoid cash flow problems in the future. 

• Budget for your time
  

Don’t forget to budget for the cost of your time.  If you find yourself working extra hours on a project, and those hours are not billed to your customer/client, eventually you will begin to lose profitability. 


Your budget is not static, it is constantly changing and therefore needs to be reviewed on a regular basis.  Set time aside each month to review your budget, cash flow and financial statements.