If you read our recent Business Financials 101 article, you know what numbers you should be tracking to keep your business strong. Now it’s time for the next step — using those numbers to make a plan. That plan is called a budget. We’re diving into budgeting for small businesses.
A budget is not just a list of numbers. It is a tool that shows how your business will earn and spend money. For local businesses, a budget helps you stay steady during slow seasons, prepare for surprises, and make smart choices about growth.
Why Budgeting for Small Businesses Matters in Richmond VA
- Helps you spend money with a clear plan
- Prepares you for slow seasons or busy months
- Gives you a safety net for emergencies
- Builds confidence for big decisions, like hiring or expanding
The Building Blocks of a Small Business Budget
Revenue Forecast – Look at past sales and think about trends, price changes, or new services. For seasonal businesses, plan by month. Try the Finance Tracking & Forecasting Toolkit by Farrell Financial to make realistic projections.
Fixed Costs – Bills that stay the same each month, like rent, insurance, and software.
Variable Costs – Expenses that change, such as inventory, marketing, or seasonal staff.
Emergency Fund – Save 1–3 months of expenses for unplanned costs.
Profit Goals – Decide how much profit you want to earn, and include it in your plan.
How to Create Your Budget Step-by-Step
- Gather at least 12 months of sales and expense data.
- Forecast income slightly lower than expected, and costs slightly higher, to be safe.
- Plan month-by-month to see busy and slow times.
- Add in any growth projects, such as a new product or location.
- Review your budget every three months and adjust if needed.
How to Use Your Budget Every Day
- Compare your actual income and expenses to your plan each month.
- Use your budget to decide on marketing, hiring, and big purchases.
- Share parts of your budget with your team so everyone knows the priorities.
Tools and Support for Richmond Business Owners
Join a Workshop: Sign up for Mastering the Building Blocks of Financial Success to learn simple ways to build and follow a budget.
Get a Mentor: Work one-on-one with an mentor who specializes in accounting and finance to review your plan and keep you on track.
Use the Toolkit: Download Farrell Financial’s Finance Tracking & Forecasting Toolkit to make clear projections for your business.
The Bottom Line
A budget gives you control over your money and helps you make smart choices. It is one of the most powerful tools for small business success. Start your budget today, use the free resources available, and get support from your local business community.
Quick Resources:
Download the Finance Tracking & Forecasting Toolkit
Register for Mastering the Building Blocks of Financial Success
Request a mentorship with a mentor who specializes in accounting and finances.
