What is the importance of a business budget? 

Some of the importance of a business budget include;

1. A business budget is a financial plan that contains the estimation of expenses and income over some time. It gives you a clear understanding of your business income and expenses.
2. A business budget allows you to make crucial decisions like improving efficiency, employing new workers, lowering costs, buying equipment, and so on.
3. A business budget specifies your business's financial and operational objectives. 
4. It helps to control business finances and ensure that you achieve business goals.
5. A business budget allows you to develop a plan for the future.
6. A business budget allows you to obtain loans from the bank or attract investors.
7. Budgeting helps you prepare for emergencies that may occur during business operations.

Things to include in your budget

• Payroll: If you have employees or as the owner, you take a salary.
• Rent: If you are renting a space for your business.
• Utilities: Light, water, internet, and phone bills
• Insurance: If you have insurance to pay for
• Professional services: These are expenses that keep the business going, such as repair, printing services, or packaging expenses
• Advertising: Cost for advertising or marketing business products or services
• Loans: business loans that have to be repaid

Sample templates for business budget

A business budget template is an important tool you can use in running your small business. With a good business budget template, budgeting is easier to prepare. 

When you have your budget, you must always compare the actual amounts to the ones in your budget regularly. This means that you should always have access to your budget, fortunately, there are free small business budget templates available online to use and we will be sharing with you some of the best you can use.

1.  Capterra's budget template:

This template is a simple excel sheet that you can use to create a monthly or annual budget for your business and also compare actual numbers with budgeted numbers. It is convenient and easy to use as it has a detailed instruction tab that guides you on how to use the template step by step. 

2. PDFConverter.com:

PDFConverter has compiled 15 small business budget templates that can cater to your budgeting needs. This budget template is suitable for new small businesses. The cash flow template is great for identifying and plugging cash flow leaks.

3. Google Sheets:

If you have Google sheets, you can easily create a budget for your small business here. On Google sheets, navigate and click on the template gallery, there is an annual business budget used for free. This Google sheet template also allows you to have a visual representation of your income and expenses so that you know where you stand financially. 

4. Microsoft Office Template:

Microsoft Office contains a wide range of useful budget templates you need for your business. They also feature charts and graphs for your understanding from time to time. 

5. Score:

The score is a resource for small businesses and it includes budget templates designed for financial projections, expenses, profits and loss statements, and cash flow statements. You can get all the resources you need to plan your business on Score.

6. Vertex 42:

This site relies on excel templates for a business budget. It includes samples of budget templates for businesses that offer products or services. The worksheet breaks down sales and expenses month by month.

Designing your budget

If you have decided on the template to use, you can now start to design your budget. Most people don't have clue on where to start regarding designing a budget, here are four steps to help you get started:

1. Write down your income statement for the future i.e how much you expect to make over a certain period and how much expenses you think you would make.
2. Enter your business expenses: These will help you capture all your spending for some time, be honest with it, and do not exclude any expenses.
3. Enter your income in step 1.
4. Lastly, review your budget: You can identify your expected loss and make adjustments to cut costs.

These steps will help you to know what to expect when you are done with your budget. Note that you do not force your budget to balance so that you can have unrealistic income for yourself, this will only lead to frustration in the long run. 

Proper budgeting allows the business owner to anticipate expenses, plan for the future and make necessary changes in the business. It will also help you set goals, create reports and communicate priorities.

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