I am going to confess something that accountants and numbers people will cringe at when they read this blog… I haven’t adjusted my business budget or even looked at it in nearly 5 years until now. I know, that is an awful thing to say as an entrepreneur and business owner. There is no excuse other than life happened.
Almost five years ago this month I turned in my notice. I gave my company 1 month after working for them for 8 years. I had built a small freelance business on the side and felt ready to take the leap into business ownership. I had NO idea what I was doing and what would come of this little dream called The Savvy Peach. All I knew was what I needed to make to keep my lights on and food on the table. During this season of prep, I made a quick budget on a piece of paper. I tucked it into my filing cabinet and never looked at it again.
After seeing steady growth and getting myself back into the swing of things after a 67 day long January (anyone else?), I knew it was time to reevaluate my business finances and budget. Honestly, the time spent on actually developing the budget was short compared to the days of dreading that took place before. I didn’t even want to know how carelessly I had been spending the income of the Peach… and I REALLY didn’t want to know how much I had spent on more fonts that I didn’t need (it’s a designer problem y’all.)
Step 1: Income
This part was awesome. I looked back through our 2018 reports and figured out how much The Savvy Peach brought in each month on average. I then reviewed each month and decided to build my budget around the lowest monthly income.
If you don’t have an accounting program, I highly recommend Wave. Their software is simple to navigate and they have reports to help with this.
Step 2: Fixed Costs
Your fixed costs and expenses that are “fixed”, meaning they are the same each month. What programs, fees or subscriptions, products, etc. do you use each month that you need to add to your budget?
Step 3: Variable Costs
This category is THE hardest for me to wrap my brain around. Each month there are things (fonts) that sneak up and just have to be purchased. These often change based on your businesses income (i.e. the more you bring in, the higher these will be.) I found several items that I could average out and base values on here such as fonts (surprise!), meals/entertainment, travel expenses, and supplies.
Step 4: Plan for Purchases
You know that there are things that come up in business that require funds. For example, several years ago my computer DIED right in the middle of a BIG project. I hadn’t planned on spending a few thousand dollars on a new Mac, but I did. Because of this, I make sure to budget a portion of my income each month for larger, one-time spends.
You did it. Now, my favorite thing… it’s time to make it pretty. I’ve designed a beauty for you to download and use for your business. Included are ideas in each category we discussed along with some blanks for you to jot down your own.
I’d love to see your business budget in action. Snap a photo of you using the freebie and tag @svypch on Instagram!