The first step towards creating a budget is to start with identifying your company’s goals and objectives. The second step is to work backwards from your company’s projected net income for a fiscal year. With this number, you can project the expenses and revenues needed to achieve this goal. The third step is to determine what you’ve already committed to spending in the year, and to confirm detailed costs. The final step is to break these annual numbers down into monthly budget goals.
Setting goals is foundational to this process. As you set operational goals like expanding your workforce, buying equipment, or opening a secondary location, budgeting means finding out how much these things will cost. If you know that expanding your workforce is going to increase your annual costs by $100,000, dig in further. What are the recruiting fees, employee benefits, key-person insurance, payroll fees. You will want to budget for this before starting the hiring process.
Here’s the advice: you are too busy to do this. Don’t do it yourself. Get fractional CFO services to prepare a budget for you. Give that person your goals, access to your books, meetings with key people, etc. They’ll do the legwork. You approve the budget. That’s the only painless way.