Budgets play a crucial role in providing businesses with control over their projected incomes and expenditures. Our free budget template streamlines the budgeting process, making financial planning easier.
Budget templates allow businesses and private individuals to plan their financial situation, by systematically recording income, expenses and profits. Essentially, it’s a spreadsheet designed to empower users with the ability to organise their finances effectively, facilitating informed decision-making regarding spending habits and financial goals.
Budgeting isn’t just about numbers — it’s about securing your financial future. In business, it ensures you have the resources needed to achieve your objectives, aids in goal setting, and optimises resource allocation. For private individuals, budgeting fosters healthy financial habits, aids in debt management, and paves the way for achieving your financial aspirations. Moreover, it safeguards against overspending, transforms aspirations into achievable targets, and instils financial discipline.
5 reasons you should make a budget
Making a business budget is crucial for several reasons. Here are five key reasons why it is important:
Ensuring resource availability: A budget ensures that a company has enough resources to meet its goals.
Effective goal setting: It helps set and meet financial goals, manage unexpected challenges, and turn a profit.
Tracking progress: Budgeting allows you to set targets across the entire business and provides a means of tracking progress towards those goals.
Obtaining finance: A detailed budget demonstrates that the business is well-managed and has a growth plan, which is essential for obtaining finance.
Long-term planning: A budget helps in working toward long-term financial goals, keeping spending in check, and ensuring that savings are on track.
Take the first step towards financial clarity. Download our free budgeting template for Microsoft Excel and Google Sheets and embark on your journey to financial empowerment. Start budgeting smarter, not harder — it’s 100% free.
Simple budget template
How to create a budget, step by step
Step 1: Download a budget template
Before embarking on the budgeting process for your business, it’s beneficial to have a structured format to organise your finances. Downloading a free business budget template can provide you with a solid foundation to start building your budget.
You can find various templates online or use accounting software that offers customisable templates tailored to your business needs. Having a template in hand will streamline the budgeting process and make it easier to track your income and expenses.
Step 2: Determine your revenue streams
Once you have your budget template ready, the first step is to determine your business’s revenue streams.
Identify all sources of income, including sales, services rendered, subscriptions, licensing fees, or any other revenue-generating activities. Make sure to consider both recurring and one-time sources of revenue to accurately forecast your income.
Step 3: List your operating expenses
Next, you’ll need to identify and list all of your business’s operating expenses.
Start with fixed expenses, such as rent or lease payments, utilities, insurance premiums, salaries, wages, and any other recurring overhead costs. Then, list variable expenses, including raw materials, inventory purchases, marketing expenses, travel, and entertainment.
Step 4: Differentiate between essential and non-essential expenses
Once you have your list of expenses, categorise them into essential and non-essential categories.
Essential expenses are critical for the operation and growth of your business, such as payroll, rent, utilities, and raw materials. Non-essential expenses, on the other hand, are discretionary and may include items like marketing campaigns, travel, or entertainment.
Prioritise essential expenses while carefully evaluating non-essential ones to ensure they align with your business objectives.
Step 5: Set financial goals
With a clear understanding of your revenue streams and operating expenses, it’s time to set financial goals for your business. These goals could include increasing sales revenue, reducing operating costs, improving profit margins, or expanding into new markets.
Be specific about your goals, including measurable targets and timelines for achievement.
Step 6: Allocate your resources
Now that you have a clear picture of your revenue and expenses, it’s time to allocate your resources accordingly.
Start by covering your essential operating expenses to ensure the smooth functioning of your business. Then, allocate funds towards achieving your financial goals, whether it’s investing in marketing initiatives, expanding your product line, or upgrading your infrastructure.
Step 7: Track your spending
Creating a business budget is only the first step; effectively managing your finances requires ongoing monitoring and tracking of your spending.
Use accounting software or budgeting tools to track your expenses regularly and compare them against your budgeted amounts. Analyse variances and identify areas where you may be overspending or underspending, making adjustments as needed to stay on track with your financial goals.
Step 8: Review and adjust regularly
Your business environment is dynamic, with factors such as market conditions, competition, and internal operations constantly evolving. Therefore, it’s essential to review and adjust your budget regularly to adapt to changing circumstances. Conduct periodic reviews of your budget performance, identify any deviations from your financial goals, and make adjustments accordingly. Stay agile and flexible in managing your budget to ensure the long-term success and sustainability of your business.
Why you should use our free budget template
Easy to use
Designed with simplicity in mind, our template is user-friendly and intuitive.
Say goodbye to hours of spreadsheet tinkering—we’ve done the heavy lifting for you.
Less risk of error
Our template minimises the risk of calculation errors, ensuring accuracy and peace of mind.