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How to Budget - And Where to Get Help With It

Written by Bedfordshire Chamber of Commerce | 09 Dec 2021

Setting and managing budgets for your business can be a challenge. After all, planning how to spend what you can’t be sure you’ll have is something of a moving target!

With this in mind, we’ve put together a whistle-stop guide to take you through the budget essentials, and point you to advice and resources we at the Chamber offer to help make budgeting if not a breeze, then at least a little less turbulent.




The basics: what a budget is
A budget is a forward-looking plan containing information about anticipated sales and associated costs within that period.

Why’s this important? Because when sales exceed costs, that’s profit – and profit is the clearest measure of whether your business should continue operating as it is, or whether you need to make changes to minimise risks and maximise opportunities.


How often should you budget?

For this reason, a budget should be regularly revisited and adjusted to take account of changing circumstances.

In fact, although budgets are traditionally produced to give a 12-month forward view, with the planning phase for the next budget period beginning three to six months ahead, many businesses find it more useful to take a “rolling” approach, producing a totally revised budget every month.

This takes more time and effort, but it also enables the business to be more agile and responsive.


What should a budget cover?

Essentially, a budget should typically encompass four sub-budgets that, together, deliver the overall picture – sales, stock and production, overheads, and marketing.

• Sales budget – This is an itemised list of forecasted sales in units and value, often by individual product and service line / type, and perhaps even by region. The sales budget is usually done first, as its results inform what’s available within each of the other sub-budgets.

• Stock and production budget – For businesses that sell physical products, this is basically about the supplies you need to create those products, from raw materials to finished goods. The budget must take into account stock levels, restocking policy, stock costs, and direct labour costs (the wages of employees directly involved in the production process).

• Overhead budget - Overheads are any costs not directly related to sales or production - for example, non-production staff wages, electricity, communications infrastructure, and other expenses such as licences and some software. Many service-based businesses’ costs tend to fall into this category.

• Marketing budget - This will typically include paid advertising, content creation, website design and management, marketing-specific software, and other marketing- and promotions-related items.

When these sub-budgets all pull in the same direction, the outcome should be an overall budget that works for the business as a whole.


Where to get help with budgeting (and more)

Nobody’s pretending this is a simple process, however. Budgeting raises the dual concerns of where the income is coming from, as well as how it should best be spent. This is why, at Bedfordshire Chamber of Commerce, we offer help with both.

From supporting you to identify and access grants and funding, to hosting webinars and learning resources and delivering bespoke training, to connecting you to budgeting tools and experts amongst the Chamber membership, we provide everything you need to get on top of this vital discipline and grow your business.

Want to learn more? Get in touch on 01582 522 448 and let’s have a conversation.

Topics: finance, Budget, Business Finance

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