5 Tips on Budgeting

• Think of a budget as a useful tool—a written financial plan that helps you set goals and measure progress.
• Start by coming up with a sales revenue target.
• Based on past experience, estimate your cost of goods sold and subtract it from the sales revenue to come up with your estimated gross margin.
• Forecast variable expenses and fixed expenses. Subtract these expenses from your gross margin to arrive at your estimated net income.
• Break your annual budget into quarters and monitor your progress every three months to detect problems and make corrections.