A budget plan is a financial forecast of the economical health of your business. It tells you whether you (can) make money or not. It might sound greedy, but making money is as crucial for your business as eating food is for your body. You might be able to do it for a while, but you don’t make money at some point. Your business will be shot down.
The business budget template forecasts your financials in a two year timeframe. It is fairly simple to use and doesn't require a financial background. Just follow the steps below and you will have a financial overview of your revenue, expenses, cash flow, VAT, assets, and liabilities. You can use it to analyse what is required for you to make money. Plus, your bank or accountant might also be interested in this if you want to apply for a loan.
The Excel file contains 3 overall sheets: an income statement, a balance sheet and a cash flow statement.
The income statement The income statement lets you know whether you are making money or not. Simply by subtracting the costs from the revenue, you know whether you have a profit or a loss. This sheet covers 3 things: revenue, costs, and profit/loss.
The cash flow statement The cash flow statement tells you how much cash you have in the bank each month. This knowledge is especially important if you are in the startup phase of your business, if your business is sensitive to seasonal fluctuations or are expecting an uncertain future.
The balance sheet A balance sheet is your financial statement that contains details your company's assets or liabilities at a specific point in time.
