If you find yourself feeling overwhelmed at the thought of creating an annual budget for your business - you are in the right place.

I'm here to assure you that you're not alone.

Together, we're going to turn this intimidating task into an exciting adventure.

This post is the first in a series that will guide you through the thought process of creating a truly useful, well-planned, tool to empower your business growth over the coming year.

Ready? Let's dive in!

Your Business Roadmap

Think of your business roadmap as your GPS. What are your dream destinations for your business in the coming year? This could be anything from launching a new product to increasing your customer base. Whatever plans you have for this coming year, this is the place to flesh those out to be sure they are considered because your budget is the vehicle that will get you to these destinations.

Cash Flow Planning

Cash flow planning is all about ensuring that money flows into your business just as smoothly as it flows out. This involves tracking your income and expenses to ensure your business maintains a healthy balance throughout the year. Tools like QuickBooks can be your best friend in this journey, offering easy-to-use cash flow calculators. This is the place where you look back at past history and observe patterns of ebb and flow within your business. Make notes! These things are VERY important in your planning.

Cost Control

Cost control is about finding clever ways to cut costs without compromising on the quality of your offerings. Think of it like finding the best deals when you're shopping for groceries, only this time, it's for your business! This is the place you look back at ALL the things your business spent money on in the past year (or two) and really consider the cost vs value of those things. Consider alternative options and solutions. Do some price shop comparisons. Once you have done this exercise, you can feel confident that you are spending wisely and can plan accordingly in your budget.

Contingency Reserve

A contingency reserve is your financial safety net. By setting aside some funds for unexpected costs, you'll be prepared for any storms that come your way. It's always good to have a safety net, right? Sometimes money seems so tight that it can be hard to think ‘save’ but having even a small reserve fund will help you sleep better at night. Consider what amount you think you can set reasonably set aside and factor that into your budget.

Pricing of Products and Services

Are you considering changing your prices or perhaps offering discounts? Whatever your strategy, your budget needs to reflect it. Now is the time to do a deep dive into the true COST of the goods and services you provide to your clients. It can really be a wake-up call to see what it actually costs you to run your business and what profit margins need to be for you to be successful. While raising prices can be scary - now is the time to do it and there’s no better way to base those decisions than on solid research. So dig in and do the mathing. Be sure you’re priced right. The figure that into your budget.

Sales Estimates

Sales estimates involve predicting your future sales based on market trends, economic conditions, and your past performance. Websites like Statista can provide valuable data for your research. Understand your marketplace, look carefully at past experience and factor with market trends. Make adjustments according to your expected growth and use this information to help figure out income projections for your budget.

Fixed and Variable Expenses

Fixed costs, like rent and salaries, don't change. Well, I should say… they are usually fixed one year at a time. Variable expenses, like the cost of materials and shipping, can fluctuate frequently. Your budget needs to account for both types of expenses and have the right amount of wiggle room to accommodate expected shifts.

Profit Goals

Setting profit goals is like setting a weight loss goal before starting a new diet and exercise regimen. What's your target? This is where you dream big. While your ultimate profit goals may not come to fruition in a single year, you need to have these goals in mind and make your annual budget align with them from year-to-year so that you arrive there over time. Set lofty goals, and create objectives and milestones to reach for along the way. Build these into your budget as well.

Time as Money

Consider how you and your team spend your time. Could you be using it more effectively? Tools like Toggl can help you track and manage your time better. Painful as it may sound, getting into the habit of tracking your time is an extremely illuminating experience. Whether you do this periodically, or all day every day - you definitely should undertake a time-tracking exercise on the regular. You will be SHOCKED and enlightened. Get real with how you spend time and make adjustments that align with your business goals and roadmap accordingly. Are you spending more time on client work than you realized? Are your prices set to compensate you appropriately for this? Do you need to adjust your prices? Do you need to budget your time differently? Etc.

Owner's Salary

Last but not least, don't forget to pay yourself! You're working hard, and you deserve to be compensated. Pay yourself FIRST. Like the ‘profit first’ concept of financial literacy, budgeting for your own payroll is vital. It is all too easy to hack yourself off when things get tight. Remember - you didn’t get into business to work for free. Honor yourself and your hard work by paying yourself what you deserve. To make this happen - you need to have it in the budget.

Creating an annual budget might seem intimidating, but remember, a well-crafted budget is like a lighthouse guiding you toward business success. If you ever find yourself in choppy waters, you can revisit your budget and find the intentions and the controls there to steer that will steer you back to safety.

So, are you ready to dive into budgeting? This time next year, you'll be glad you did!

Be sure to subscribe to my emails to be alerted to the future articles in this series and also to receive the VIP exclusive tools I share only with my email community. (Hint - there will be some nice budgeting worksheets and tools coming up, as well as an exclusive discount on services, that you won’t want to miss out on!) Subscribe below👇

⏰ If you know you need or want help working through these steps and configuring your annual business budget, schedule a call with me today to discuss the process and how will work together to create a budget that will truly empower you!

I’ve got your back. You don’t need to go it alone.

~ Becky O’Neill, Author
Founder of Specialized Business Services LLC

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Keywords: Annual budget, Business roadmap, Cash flow planning, Cost control, Contingency reserve, Pricing of products and services, Sales estimates, Fixed and variable expenses, Profit goals, Time as money, Owner salary, Budgeting 101, Financial planning, Business growth, QuickBooks, Statista, Toggl, Business success, Entrepreneurial path, Business Services, Business expenses, Business income, Financial safety net