When you clearly understand your business idea, it seems like you are ready to make it real.
The idea of having your own business looks exciting, however, the idea itself is not enough to create an actual business which works and brings profits.
You should find investors, and the only way to prove your worthiness for them is to present a proper financial plan, which must include your accurate budget.
A budget is what helps you set realistic goals and plan the direction for further development.
This document allows you to estimate the financial health of your project, measuring your achievements and looking for new investment opportunities.
A working budget is a crucial thing for any business and one of the oldest means of management in the world.
It’s important to understand that you cannot just write down a budget for a month or a quarter and forget about it after that. The budget can only help if you analyze, use, and improve it.
Why Prepare a Business Budget Worksheet At All?
If you’re not sure you need to write a business budget, the chances are your business is really small.
When you have a small business, it’s much easier to keep in mind all your expenses and cash flow.
Even some well-established companies may show similar cash flow patterns every year. Nevertheless, you need at least to write a draft of your business budget because, in case of any problems with the supply chain or increased rent, you’ll certainly need it.
A monthly budget review can help you see where your company have succeeded, and what needs to be improved.
For example, when you switch to a new health insurance company in order to make coverage cheaper, your monthly budget will show you how this decision affects your business in general.
A business budget worksheet can also show what problems need to be solved.
For instance, if you own a retail business, you may realize that you have to spend more on advertising during the fall so that you could take advantage of holiday shopping.
If some changes in your business affect your company’s taxes in the long term, you may also need to pay for extra accounting work so that your accountant would help your company go through these consequences.
In this case, your budget will also help you plan everything in advance.
How to Make a Budgeting Worksheet Using Mind Maps
Your business budget should include such information as: expected revenues; variable costs (e.g. production expenses, materials, and other costs associated with sales); fixed costs (license expenses, rent, and other costs which are not related to sales); semi-variable costs (wages and other expenses that may or may not change depending on sales); profits (obtained by deducting costs from revenues and expected sales).
To form a budget, you should follow these steps:
- Collect historical information
You need information on sales, operating expenses, revenues, and salaries. If your business is new, take a look at financial data of another company of the same size which operates in the same industry, and use it as an example.
- Set profit goals
Make sure your estimations are realistic. Start with calculating the expected sales, taking into account more and less active periods of trade, and holidays.
- Calculate your fixed costs and estimated variable costs
Taking into account equipment, materials, salaries, labor, expenses associated with training, traveling costs, and employee benefits.
- Calculate profit margin
To calculate the expected profit, deduct all the expenses from revenues and sales. Don’t forget to include such costs as materials and equipment, as well as total costs required to produce your service or product.
- Update your budget
It’s very important to adjust your budget as you get actual sales and undertake actual expenses.
The main difficulty with writing a budget and planning finances is a lack of convenient tools.
Of course, there are many accounting programs which help with calculations, but how to record all the necessary information so that it would be understandable yet detailed?
Spreadsheets are a traditional solution.
However, you don’t need to rely on spreadsheets only.
For example, mind maps allow you to present a lot of information in a perfectly structured way. One mind map, where different sections are logically connected to each other, will be equally useful and understandable for accountants, managers, investors, and business analysts.
There are many mind mapping programs available online, however, some of them are especially good for making budgeting worksheets and financial plans.
This is a web-based software with a simple interface.
It allows users to create mind maps and to compose storyboards that consist of many mind maps presented in a form of slides.
However, the main advantage of this program is that it has an impressive set of built-in budget measurement tools.
With these mind maps, you can track progress and sort multiple budgets hierarchically. It also has a good data protection system for confidential projects.
This program allows you to collect data from different places, compiling different sources and various types of documents.
It also has many tools for customization so that more people will understand your concepts.
It will also help in project planning, as it enables you to prioritize tasks and to estimate possible outcome.
The main advantage of this mind mapper is numerous templates.
There are a few dozens of diagrams and simple customization tools. It’s also a good solution for collaboration, as it allows collaborators to securely communicate with no need to leave the platform.
Creately is also mobile friendly.
Creating a business budgeting worksheet is not an easy task, however, there are many tools that can help you cope with it.
Mind mapping allows you to present a budget or a financial plan in an understandable and comprehensive way.
Using mind maps, you can include all the necessary accounting details while keeping a simple overall structure, which is great for presentations and business meetings of any kind.
About the Author: Ester Brierley is a QA Engineer in software outsourcing company and a competent virtual assistant for College Writers, but thinking about her own entrepreneurial journey. As a seasoned content creator, she adores researching cutting-edge digital and lifestyle trends and sharing them in her writing pieces. Follow her on Twitter.