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Calculate Start-Up Costs
First, start calculate the necessary cost to start-up the imagined business. -
Operation Costs
Determine the cost to operate the business. This mostly will include utilities. -
Estimate Profits
A business must estimate profits to limit their expenses in order to generate profits in the end. -
Revenue Needed to Continue the Business
This is a important category in a budget because it states the necessary revenue in order to keep the business running. If this goal is not met, the business may enter a decline. -
Payroll Costs
Payroll may need to be considered if your business involves employees. They need to be paid and will quit if they go unpaid. -
Time Range
The time range of a budget is usually 1 year that can be further divided into quarters and months. -
Expenses: Fixed or Variable
It is important to determine if expenses are fixed or variable. Fixed expenses are mostly the same every time and often out of the owner's control. Variable expenses can fluctuate and are more in the owner's control. -
Refer to your Budget Often
Referring to your budget can be beneficial when making decisions. It can provide informative information about your business financial goals.
