Week 3 Day 3 Action Items

Day 3

• [ ] Explore a sample budget and identify key components.
• [ ] Consider your business's financial goals and priorities when crafting your budget.

Items to consider when creating a business budget

This checklist helps ensure you cover the essential components when crafting a budget for your small business, giving you a structured approach to managing finances effectively. Adjust the checklist based on the specific needs and nature of your business.

1. Income Sources
   • Explanation: Identify and list all sources of revenue or income your business generates. This can include sales, services, interest, or investments.
2. Fixed Costs
   • Explanation: List recurring expenses that remain constant regardless of business activity, such as rent, utilities, insurance, and salaries.
3. Variable Costs
   • Explanation: Note expenses that fluctuate with business operations, like raw materials, marketing, commissions, or variable labor costs.
4. One-Time Expenses
   • Explanation: Identify and plan for occasional or yearly expenses, like equipment purchases, renovations, legal fees, or major technology investments.
5. Savings and Reserves
   • Explanation: Allocate funds for emergencies or future growth. This ensures you have a safety net or funds for expansions or unexpected costs.
6. Debt Payments
   • Explanation: Include any repayments for loans, credit cards, or outstanding debts in your budget planning.
7. Taxes
   • Explanation: Account for all taxes your business is responsible for, including estimated taxes, payroll taxes, and sales or VAT taxes.
8. Operational Expenses
   • Explanation: Budget for day-to-day operational needs, like office supplies, maintenance, travel, or training costs.
9. Revenue and Growth Goals
   • Explanation: Set clear targets for sales, expansion, or marketing strategies and allocate specific budgets to achieve these goals.
10. Monitoring and Review
    • Explanation: Regularly review your budget to compare planned vs. actual expenses and income. Adjust as needed based on changes or unexpected events.
11. Contingency Plans
    • Explanation: Plan for unforeseen circumstances by setting aside funds or having backup strategies for unexpected cost increases or revenue drops.
12. Benchmarking
    • Explanation: Compare your budget to industry standards or competitors to gauge your business's financial performance and identify areas for improvement.