A business budget is necessary for tracking income and expenses, meeting financial goals, planning start-up costs, and calculating how to finance an expansion of your creative practice.
Budgets aid in improving cash flow and reducing non-essential spending. A monthly budget will help you gain a better perspective of your business’ changing financial picture than a quarterly or yearly budget.
Determine how to create a budget for your art/design business. Whether it’s a paintbrush and some art canvases, a budget spreadsheet, or accounting software like Quickbooks or MYOB, you must master the budget culture.
Budgeting on a monthly, quarterly, or annual basis?
Both are useful, but a monthly budget allows you to compare your predictions to your actual income and expenses.
Include fixed costs.
Your fixed expenses should include costs that will not change, such as studio rent, commercial space bills, or mortgage and loan payments.
Include variable costs.
These cover monthly costs such as utility bills and consumable supply costs. You can decide on an average of these costs over the previous six months or year.
Estimate your earnings
Fill out the income section with this figure, but leave the actual income space blank until the end of the month, quarter, or year.
Maintain a regular budget analysis.
Examine your projected expenditures and income on a regular basis to ensure that they correspond to the amounts you earned and received. You can accomplish this by deducting actual expenses and income from budget figures, or vice versa. Begin with the larger number. For example, if your actual expenses exceeded your budgeted expenses, divide the budgeted expenses by the actual figures to determine the difference.
You will not have previous expenses to create a budget if you are creating a business start-up budget. So, rather than using averages, research the costs of the expenses you need to include in your budget. Then, review your budget on a regular basis so that you can make adjustments.
alterations to improve your company’s cash flow.
Want to learn more?
- Just starting out? CLICK HERE
- Been working in your business for two years or more? CLICK HERE
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Now is the time to let your passion SHINE.
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To your success,
Vinh Van Lam & Stuart Horrex
Your Coaches ArtSHINE industries