How do you start a budget?

There are a number of data requirements to make the budgeting more effective and accurate.

Firstly identify fixed costs that will be required.

These are the financial outgoings you know must be paid out in the forecast year. These are i.e. rents, utilities expected for instance heating, water, fuel, licences and professional fees like Accountants, legal support.

You will need to look at labour costs and expected increases if/when work load demands, maintenance of equipment, administration costs right down to paper clips, replacement of equipment like computers, printers chairs and manufacture equipment. You will need to have a very accurate estimate of income. Then you can work out what you can allow the business to spend against the income expected and profit margin require.