Budgeting is a swear word for some; however, having a good budget, and understanding it, means a business can make much better financial decisions.
There are two main techniques, and you need to decide which works best for you.
Firstly, enter your income and expenditure from previous years into a spreadsheet.
Begin to split your costs into 2 categories: ‘Variable’ costs are ones which depend on how your business operations and spending decisions fluctuate over time – for example, if you decide to hire a consultant, or upgrade your equipment, these are variable costs.
Meanwhile, ‘Fixed’ costs will be incurred even if you do no work and your circumstances don’t alter; for example, office rent would be considered a fixed cost.