Running a successful small business is hard. Running a successful small business without a budget is virtually impossible.
Without easy access to your financial information, many decisions are tougher than they should be. For example: How could you make an informed decision about whether it’s a good time to grow your business, purchase new inventory or assets, or give yourself a raise?
Clear, up-to-date budgets can help with questions like these.
A budget is a tool that allows you to measure your ideal financial numbers against your actual figures. Effective budgeting requires regular calibration of the real business environment against the theoretical one.
If that sounds daunting or time-consuming, fear not. There are online resources that simplify the process. In fact, there are several downloadable, customizable business budget templates that you can access right now. And just to keep them within your budget (see what we did there?) they’re free!
We’re going to walk you through seven of our current favorite small business budget template tools, but first let’s look at what you need to know about actually creating a business budget.
How do I create a business budget?
Creating a business budget is an extremely important step towards making sure your business not only stays on track financially, but is using the funds you have available in the most strategic ways possible. Whether you’re a startup or a more established business, adding a business budget to your business plan is a great way to stay organized and to plan how you can best use your budget to your advantage. If you are running a startup, you’ll want to budget for both your ongoing costs and the costs you will need accrue to actually get your business off the ground.
How you create your business budget will depend a lot on what type of budgeting method you pursue. Once you’ve chosen your preferred method, you can use one of the template tools we’re going to discuss to help you actually create your budget.
Master budget. If you have a master budget, your budget will involve taking the information from other smaller budgets within your business (think marketing versus labor) and compiling them into one main budget. This type of budget is a good fit for bigger companies with multiple departments who each have their own budgets. A master budget provides a more thorough look at your expenses.
Operating budget. This type of business budget is very popular and estimates revenues and expenditures during a select period of time. This allows businesses to compare their actual results to their operating budget.
Financial budget. When you create a financial budget, you’ll look past just your revenue and expenditure and include any assets, liabilities, and stockholder equity in your budget. You’ll use a balance sheet to present this information and to gain a clear vision of your business’s overall health. This type of budget is often used when a business is pursuing funding, an initial public offering, or a merger.
Cash budget. This type of budget estimates how much money will pass through a business during a certain period of time (such as a quarter). A cash budget provides insight into how an organization can meet their immediate financial obligations or if they’ll need the help of financing, such as a line of credit, to pay for any upcoming expenses.
Labor budget. If you have employees, you may want to consider creating a labor budget that can help determine how many workers you will need to hire to achieve your desired level of production and how much it will cost to do this.
Capital budget. A capital budget helps businesses plan for purchases of large assets. For example, buying a new warehouse or expensive machinery. A capital budget will account for the cost of the asset you plan to purchase and will look at the expected payback period and what the potential return on investment will be.
Strategic plan budget. By incorporating financial information, a strategic plan budget can help create a practical road map for how your business plans to grow. If you have long term goals, this budget can help you achieve them in a realistic—and frankly financially—possible way.
Static budget. If your business sales and expenses are fairly consistent, then a static budget may be all you need to keep things on track financially. You won’t alter this budget throughout the year and it can be a great way to identify variations between your budgeted and actual line items. A static budget can also prove useful when evaluating sales performance.
The download available from Capterra includes both a monthly and annual breakdown that can be used on an Excel spreadsheet. “Imagine going into a month having no idea what you were going to spend or how much money you were going to make,” the site says. “If you’re interested in having money in your bank account at the end of the month, you might want to start thinking ahead.” The goal of a budget, they say, is to have a “fixed point to track your progress against.”
Once again, you don’t need to look very far to find a range of budget templates. Google’s Template Gallery provides a variety of visually striking, easy-to-use Google Sheets business budget templates. The tables and graphs in the Summary tab offer an illustrative glimpse into your income and expenses, quickly getting you up to speed on where you stand financially. Not sure where to start? Check out this well-designed annual budget template.
Do you use Microsoft Office? If so, you are probably sitting on a database of useful budget templates right now without even realizing it. Microsoft Office has a wide range of budgets for every need. They feature charts and graphs of your variances from month to month.
Score small business resources
This resource for small business includes budget templates designed specifically for financial projections, startup expenses, profit-and-loss statements, and cash flow statements, among many others. In addition to budgeting, the site features templates for startup planning, marketing & sales, even business management.
It’s Your Money
It’s Your Money is a no-nonsense home for all things financial, with tons of helpful and educational resources and tips that business owners can use, no matter what your level of financial savvy. Here you’ll find multiple free, downloadable Excel business budget templates for help with spending plans, “planning for future expenses, amortizing loans of various types, and tracking your debt loads.”
As the site warns, these templates aren’t fancy, but they are flexible and easy to customize for your own situation. For example, find the cash-flow budget template spreadsheet here. Or, find the whole list of IYM templates here.
This site provides separate sheets for service-based and goods-based businesses to create their own budgets. Income and expenses are further broken down so that you can see where money is coming in and where it’s going out. Find and download the free budget templates here.
Another site that relies on business budget Excel template spreadsheets, Vertex 42 includes a pair of sample budgets aimed at businesses that offer services or products. It features a worksheet that breaks down, month-by-month, both sales and expenses. And for anyone considering launching a new business, the site offers a free downloadable Business Start Up Costs template.
Figure out which of these small business budgets is useful in outlining the goals for your enterprise. In order for any of these templates to work, however, you must keep on top of your daily expenditures as part of your regular routine. When you get closer to really mastering your cash flow, you’ll be better equipped to grow your business in a sustainable manner for years to come.
Bridging Budget Gaps
After you create your budget using a business budget template, you may find that you need help bridging a gap to hire staff or purchase pricey equipment. If that’s the case, then you might want to consider your financing options. Fundbox’s business line of credit options can step in and help when your business experiences slow sales, late invoice payments, or urgent unplanned expenses.