Business plan budget workbook

Financial planning for a new business is critical but it’s often overlooked because the owners/directors can be overly engaged with trying to drive sales. So your involvement in building up a budget for the business plan can be critical.

Building up the budget

In our Business Plan Budget Workbook you will find a sheet for recording: (1) sales and cost of sales; (2) staff costs; and (3) assumptions. The profit and loss sheet in the workbook brings all these elements together for you.

So you start your budget planning on the same page as the owners/directors by quizzing them on the areas they are most comfortable with, i.e. the product and sales. Issues to discuss are:

• what is the product or service?
• how will it be produced?
• who are the key customers or types of customer?
• how is the business going to sell the product/service?
• who will distribute it?
• how much will be sold and at what prices?
• how much marketing and sales promotion is needed?
• This will then give you a head start in producing a sales and cost of sales budget.

Record the key assumptions being made by the directors on the final sheet of your business plan budget workbook so that these can be revisited as you progress.

Costs

The sales volume and pricing elements of the business plan are the hardest to deal with. Costs should be easier to build up. Aim to budget for costs at the smallest level of detail you can, that way you can always back up your numbers. For example, budget for costs by individual employee and element of package (salary, NI, sales-related bonuses, etc.).

Build your workbook so that any costs that are sales volume related or dependent on the number of employees can be easily flexed up or down depending on scale factor.