How to create a great business budget that will not let you down all year long

3 minute read

 

Planning and following a budget is definitely not an easy process. There are always unexpected events, cash flow issues, supply chain issues, and other nuances that can make a decent plan practically useless.

However, just because some difficulties may occur, that doesn’t mean that one should come to terms with eventual failures to maintain a plan. Quite the opposite, an ambitious business owner has to come up with impeccable budget plans if they want great results.

To avoid risking overspending or not spending enough money to grow your business, take a look below. This guide will help you plan out your business budget and follow through.

 

Why is your budget plan so important?

Budgets are extremely important to the operation of a business. They not only help manage costs better, but they also help determine whether the owner’s profit goals are realistic.

Your budget plan is there to keep you on the right path and save you from overspending or not spending as much as you should.

A budget plan, in simple terms, is a detailed plan of future receipts and expenditures. It serves as a tool that provides control and stability. Most small businesses use a budgeting method that starts by identifying the profit they are looking to make and then listing out the expenses that are necessary for reaching their goals.

 

Creating a budget plan — step by step

Creating a budget plan is a complex task that requires your complete attention. Any error made in financial projections can lead to costly effects.

To make this process easier for yourself, take a look at the tips that should make every step of budgeting significantly easier.

 

Take a look at industry standards

It’s fair to say that not all businesses are the same, but you should definitely keep an eye on typical figures in your industry.

Do thorough research regarding the trends in your industry, speak with your colleagues, and even reach out to your rivals. Try to figure out what portion of the revenue coming in will be allocated toward cost groupings.

Small businesses are often very volatile since they are more susceptible to industry downturns than larger rivals. Therefore, it may be best to look for average figures and not focus on specifics.

 

Update the budget plan every month

The only way that your budget is going to work for you all year long is if you revisit it every month with your management team and update it according to your business performance and expenses for the prior month.

Take a good look at your sales forecast, see how your pipeline is looking. Try to find indicators that may require you to adjust your budget to cover additional inventory or staffing needs.

Also, look at your expenses. See if they are as projected or you need to cut back in various areas to make sure that you stay on track.

 

Create a spreadsheet

The foundation of a good budget plan is a good spreadsheet. This spreadsheet estimates what total money amount and percentage of your revenue will need to be allocated toward raw materials and other costs.

It is not a bad idea to contact suppliers you work with before you carry on. Repeat this same process for rent, taxes, insurances, and so on.

Finally, understand the different types of budget you will need to set up for your small business and how to implement them.

 

Don’t be afraid of making changes

Consider your monthly reviews and don’t be afraid of making the necessary cuts. Make changes to your budget and then wait to see how it impacts your profits.

Track the progress regularly. For instance, if you are under-investing in marketing, adjust your budget and see what happens to your pipeline in the following months or over six months.

Then, in your next review cycle, try to figure out if you are getting a good return on marketing money spent per sales lead. Use this information to inform future planning decisions regarding where you should allocate your costs.

 

React fast to the changes you did not anticipate

Using the budget to adjust to the unexpected is something you should be ready for. 

  • What will you do if an important client cuts their budget and reduces the amount of business they do with your business?
  • How long will it take to find a new client to replace that important revenue source?
  • What will it cost you in terms of marketing or hiring costs to help you find new business?

These are all important points to consider.

 

Always factor in some slack

Even though you may estimate that the business will generate a certain amount of revenue and thus gain a rate of growth going forward or that certain expenses will be fixed or can be managed, these are estimates and they are not facts set in stone.

Since the estimates are only estimates, it would be helpful if you factored in some slack and ensured that you have more money than you need before expanding the business or recruiting new employees.

 

Look around for new suppliers

Never hesitate to shop around for new suppliers or save money on other services being performed by your business.

This should be done at certain stages, including when purchasing or starting a business or when setting annual or monthly budgets, as well as during periodic business reviews.

 

Finally, tie incentives to budget performance

A good way to have every team member on-board with the idea of focusing and interacting regularly with your budget is to tie performance bonuses to it.

At the start of the year when you plan your annual budget, set parameters for performance tied to profit. 

However, also set parameters for other categories such as return on investment in marketing money, keeping expenses at the same or lower level than planned, and so on.

 

Wrap-up

Budgeting properly is only possible when you do it carefully and with accuracy. You, as a business owner, need to create a budget in order to forecast current and future revenue to expenses.

The overall goal is to ensure that enough money is available to keep the business up and running, grow the business, compete, and ensure that you have a good emergency fund in case something unexpected happens.

Contact us if you need accounting services!

Other articles that might interest you

Related content

Get in touch.

Start your Sleek journey today

Ready to grow your business to the next level?
Let us help take the load off your shoulders so you can continue doing what you love.

50GB data with unlimited talktime for only S$18/month and additional add-ons!

Circles.Life is a telco provider in Singapore that provides no-contract mobile plans. Their end-to-end integrated service allows customers to manage and design a plan that best fits their needs.

Enjoy the following offers:

  • 50GB data with unlimited talktime (SIM-only) for S$18/month

Once you are a Sleek client, you can access this offer.

Get access to investors, corporates and business advisors

TiE Singapore is a vibrant eco-system of Asian entrepreneurs, angel investors, venture capitalists and industry professionals – TiE has 61 worldwide chapters, 10,000 Startups, 80,000 Attendees and 15,000 members.

Benefits:

  • Exclusive access to an ecosystem of advisors, mentors, investors, corporate heads via discounted programs
  • Expand your reach beyond Singapore by attending all local and global events
  • A chance to showcase and pitch your ideas to industry leaders and investors
  • Network and build connections to engage with business experts, thought leaders and fellow entrepreneurs

Form your US company with Stripe Atlas

Stripe Atlas is a safe and easy-to-use platform for forming a US entity by removing obstacles that are typically associated with starting a company such as – legal paperwork, bank lines, obscure fees and regulatory barriers.

Enjoy the following benefits:

  • Get a discount from SGD $200 onwards on an Atlas incorporation
  • Use their services from anywhere in the world
  • An opportunity to connect with other founders and learn from experts

Enjoy up to SGD $1,425 off on eBay store and promotion fees that are incurred in the first quarter of your operation

eBay is a world-leading online marketplace that facilitates consumer-to-consumer and business-to-consumer sales.

Sleek clients can benefit from a special promotion when they:

  • Sign up as new sellers on eBay
  • Offer a minimum of 100 SKUs in their online store

You will be eligible for:

  • 100% reimbursement of the store and promoted listing fees for up to 3 months, capped at SGD $1,425, subject to promotion T&Cs

How do you qualify?

  • Leave your contact details in eBay’s New Seller Form
  • eBay’s New Seller Account Management team will review your application and reach out to guide you on the account setup
  • Once approved you will receive a promotional email from your Account Manager

Enjoy your stay with Hmlet by getting corporate rates

Hmlet provides a custom designed, fully furnished, affordable and hassle-free coliving housing solution, perfect for entrepreneurs arriving in Singapore.

Enjoy the following benefits:

Get 10% when you stay with Hmlet in Singapore
Perfect opportunity to expand your network with Hmlet’s diverse community
Enjoy dedicated assistance from Hmlet Community Managers
Flexible month-to-month membership plans

*For new members only

Promotion is valid for any length of stay up to one year.

Contact Joanna at +65 8462 6446 to get the discount.

Gain instant access to the top coworking spaces around Singapore with FlySpaces Passport


FlySpaces provides short-term flexible workspace solutions, fully-furnished and fully-serviced, for entrepreneurs, SME’s, and corporates setting up their businesses in Southeast Asia.

Enjoy the following benefits:

  • 1 month free trial of Passport Starter package and 25% off the first month of any Passport package
  • Flexible packages that scale with your business
  • Dedicated assistance from a FlySpaces Space Expert

*For new members only 

Get 3 months free trial

Metigy is the world’s leading Digital Marketing Decision Support technology made for SME Marketers. Metigy’s AI platform helps SME’s achieve 2x-3x improvement quarter on quarter.

  • AI-powered real-time insights and recommendations platform
  • Set objectives and follow Metigy’s content recommendations
  • Planning calendar, content library and social analytics
  • Prioritised to-do list and approval workflows

Once you are a Sleek client, you can access this offer.

Join Hubspot for Startups and get up to 90% off your Hubspot subscription in your first year

We’re excited to partner with HubSpot for Startups to offer their program designed specifically to help startups grow and scale better, and faster – at a startup-friendly cost! Read on to learn more about the program.

What is the HubSpot for Startups program?

  • Education resources and tailored training
  • Professional software, startup pricing
  • Integrated platform for startups

Who is eligible?

Any startup that is a current customer of Sleek and meets certain funding criteria is eligible for this exclusive program! See below for more details:

  • A startup with under $2 million in funding: ou are eligible for up to 90% off HubSpot software in your first year, 50% off in your second, and 25% off ongoing.
  • A startup who has raised over $2 million in named funding up to and including Series A: You are eligible for up to 50% off in your first year, and 25% off ongoing.

*The HSFS startup-friendly pricing is only applicable to net-new HubSpot Hubs or upgrades of existing Starter subscriptions to Basic, Professional, or Enterprise products; customers may not apply the startup program pricing to existing Basic, Professional, or Enterprise Hubs.

Once you are a Sleek client, you can access this offer.

Get 10% discount on Google Workspace licenses

Google Workspace offers custom email for your domain, online storage, shared calendars and a range of collaboration tools to increase the productivity of your team.

  • Gmail for business
  • Gsheets, Gdocs, Gslides and Google Meet
  • High security and online file storage

A 10% discount is provided for all new domains and transfers.

Once you are a Sleek client, you can access this offer.

Get US$5,000 in AWS Promotional Credits

*Only available for technology startups

Amazon Web Services provides startups with low-cost, easy-to-use infrastructure needed to scale and grow any size business.

You will be eligible for:

  • US$5,000 in AWS Promotional Credits valid for 2 years
  • 1 year of AWS Business Support (up to US$1,500)
  • Opportunities to qualify for additional credits 
 
Note: Companies may not be eligible for AWS Activate Credits if they previously received a similar or greater amount of credit. Companies may be eligible to be “topped up” to a higher credit amount if they previously received a lower credit.  For more information, please review the AWS Activate Terms & Conditions.
 
Once you are a Sleek client, you can access this offer.

Manage your company spending with a 3-month free trial

Spenmo is a B2B spend-management platform with physical and virtual card offerings. We aim to digitise expense processes and help companies eliminate fraud and overspending.

Enjoy the following benefits:

  • Free physical and virtual cards for up to 15 employees and 2% unlimited cashback for the first 6 months
  • $100K worth of free local and international invoice payments
  • Free cash reimbursement software

Once you are a Sleek client, you can access this offer.

Get S$10,000 in processing volume credit

Stripe is the best software platform for running an internet business. Stripe provides the technical, fraud prevention, and banking infrastructure required to operate online payment systems.

  • Fast, reliable and secure
  • Faster eligibility period for custom processing rates
  • Priority betas and special event access

Once you are a Sleek client, you can access this offer.

Free multi-currency account for businesses and online sellers

WorldFirst is an innovative global payment platform, helping businesses move money around the world faster, easier, safer and cheaper. 

Sleek clients can enjoy the following:

  • Open up to 10 international currency accounts for free: SGD, USD, GBP, EUR, CAD, AUD, NZD, JPY, HKD & CNH
  • Receive, hold and make payments in international currencies
  • Open your account for free with no monthly account fees and no annual transfer limits
  • Access great exchange rates
  • Manage your global finances all on one platform
  • Instant FX transactions between currency accounts

Do note that WorldFirst only works with online sellers.

Open a Singapore dollar business account from anywhere.

Wise is a global technology company that’s building the best way to move money around the world. Whether you’re sending money to another country, spending money abroad, or making and receiving international business payments, Wise is on a mission to make your life easier and save you money.

Enjoy the following benefits:

  • Enjoy S$2,600 fee-free transaction
  • Get bank details in 6 currencies: SGD, GBP, EUR, USD, AUD, NZD
  • Sleek customers get access to the Wise Platinum debit Mastercard
  • Get support from our global team in Singapore, Europe, and the US