With this quick and simple guide, get everything you need to know about how to create a simple budget for your small business.

1. 8 STEPS TO CREATING
A SMALL BUSINESS BUDGET
A business without a budget won’t work — at least not for long.
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2. 1.CLEAN UP QUICKBOOKS
 Open QuickBooks and find where payments were made twice in a month, and not
at all in the next month.
 Get rid of expense categories that you don’t use, or haven’t used, in a while.
 The more accurate and complete your historical data is, the better your budget
will be.
 Also, import actual data from QuickBooks every month into your budget to be
able to monitor your progress.

3. 2. EXPORTYOUR CHART OF ACCOUNTS AND
HISTORICAL REVENUE AND EXPENSES
 Base your future expenses on your past expenses.
 Use the same account and expense category structure you have in QuickBooks so
you can export actual data for monitoring progress.
 Exporting that data from QuickBooks is the quickest way to get started:
 Go to Reports > Company & Financial > Profit & Loss Std and set the dates for the
period you want to export, then export to Excel. Bam!You just started your
budget.

4. 3. CREATEYOUR COMPANY ROSTER
 Since salaries are the largest expense for most small businesses, you’ll want to
forecast it in detail.
 Make a list of your employees and their pay, and forecast that out month-by-
month over the next year.
 When you look at each person, consider whether they are compensated up to
market rates.What kind of raise might you give them this year (and when)?
 Building a detailed roster helps you forecast this important expense accurately.

5. 4. CREATEYOUR SALES FORECAST
 Your sales forecast drives every decision in your budget, so it’s important to create
it as accurately and thoughtfully as possible.
 The sales forecast will start with estimating current and past customer sales, line
by line.
 Then, you forecast sales to new customers by forecasting typical items.
 This data will form the milestones to measure your progress through the year.

6. 5. CREATEYOUR EXPENSE FORECAST
 Now that you know your revenue, what will your expenses be?
 Each expense line has something that drives it.You don’t just spend money, you
spend it because you need something.
 So what need is driving that expense?
 Figuring out the expense driver helps create a formula for each expense line,
which accurately forecasts expenses and keeps the whole budget interactive.
 That way, when you change your sales or staffing assumptions, those changes are
reflected in the budget.

7. 6. LINK IT ALLTOGETHER
 Now that you have a revenue and expense forecast, you can hook it all together
and see what the profit looks like.
 Do you like that number? Does that provide enough for you to reach your goals?
 If not, what do you want to change, sell more of, or spend less on?
 Make the adjustments you need in order to get your ideal number.

8. 7. ADJUST AND FINALIZE
 If you’ve made adjustments to reach a profit number that matches your goal,
make sure you know how to make those numbers a reality.
 If you need to cut expenses, where will you spend less?
 If you raised sales, how are you going to find the leads, or close the sales, in order
to stay on track with that goal?
 Once you’ve got all that down, you’ve got your final budget.
 But the most important thing is to USE your budget to monitor your performance
and make decisions, which is the next step.

9. 8. MONITOR AND ADJUST
 Each month as you finish up your accounting, you need to export your actual
results and compare them to your budget.
 Once you do that, you can analyze how you are doing and understand what
changes need to be made to stay on track.
 This is where your budget really starts to pay for itself.
 You will know so much more about your business with a solid budget.

10. VISIT US
 Visit us at http://www.lendio.com for more valuable content!
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