Every successful business needs a budget.

The best way to achieve positive cash flow is to manage your expenses and revenues to ensure that you're spending less and taking in more money.  This is process is called budgeting.

In order to budget you have to set spending limits and project revenues that wll be generated.

Budgeting is a way to estimate your revenues and expenses for a specific period of time. 

Budgeting is normally done on a monthly, quarterly and annual basis. 

Budgeting lets you implement financial discipline and hold employees accountable for managing spending.   It lets you see if you're spending more money than you're taking in and if you have enough money to fund operations and expand the business.

Budgeting forces you to examine the company's operations so that you could see problems and take actions before they arise.

Every small business should have a budget.

What should be covered in a budget:

A budget simply list all of your projected Revenues and Expenses and shows what your Net Income Before Taxes are projected to be.  At the end of the reporting period you get to compare the Projected Revenues and Expenses to the Actual Revenues and Expenses. 

Revenues/Income:  Revenues comes from the products and services that you sell.  It is any source from which you are receiving an income.  Revenues are unique to each business.

Expenses:  Expenses are all of the things that you will spend money on.  Some examples include, salary/wages, supplies, insurance, utilities, rent, payroll taxes & cost, interest, etc.  Expenses are unique to each business.

The tools listed below are great resources for establishing a budget for your small business.  Also, most accounting software also have built in tools that allow you to do budgeting for your small business.

Item Description Cost
QuickBooks Online Plus For $39.95 this application lets you create budgets, manage your company's finances, perform payroll management and much more.  It can be accessed and used from any device (computers or mobile devices) and lets up to 5 users access and use it. $39.95 per month
Microsoft Excel Microsoft Excel has budgeting templates that you can use for free.  If you already have Microsoft Office then you have Excel with all of the free budgeting templates.  In Microsoft Excel go to File --> New --> and select "Budgets" under the "Office.com Templates section" --> cick on "Business" and select a budgeting template. Free