A business plan proper contains lots of non-financial information, but all roads lead to the bottom line. A simple way of creating a budget from your other business assumptions is to do it in ….. wait for it ….. Excel.
With a row for each income/expense heading and columns for time periods (usually months) you can quickly put together a budget profit and loss for the next financial year. For some expenses particularly overheads you can refer to the current cost base, and depending on the nature of your business this can work for revenues too. If you have departments or divisions in your business you can have a budget sheet for each of them and total to get the big picture. Likewise for different product or service lines.
You can then do other things, such as looking at profitability, exploring the impact of sales or costs going up or down, work out your break even point, and create a cashflow budget.
Drop me an email if you’d like a copy of the spreadsheet template, and look out for other business planning posts in this series.
Chris Dixon, Eightoaks