April was the start of the new financial year in the UK. A time to reflect on how the business did financially last year and envisage where it will be next year through budget planning. This might line up with the goals for the year. Now, I am not a financial wiz, nor am I a financial advisor. This is a blog based on my experiences and what I do to ensure that I have a handle on my business.

One thing that is often forgotten for SME’s and start-ups, is a financial budget and forecasting. It was one of the things when I set up, I knew how many hours I needed at a certain price, to be able to live on. But I don’t remember actually sitting down and working out what my costs were. It was one of the ‘where do I start’, sort of situations. In fact, when I sat down and did it, it was quite cathartic when you do it, in small steps.

  1. Make a list

It might sound daft, but I write a list of EVERYTHING that I use or think I am going to use over the next 12 months. Most of this is based on what I used last year. Primarily I am looking at things not costs at this time.

I start with the computer – apps, software, printer, printer ink, printer paper. Then work to equipment, stationery, transport.

Don’t forget your materials, if you are producing something.

Then I look at registrations, insurance and memberships. ICO is one that most businesses need and is an annual fee.

I also have training on there. I remember to invest in my skills – but I only add it if it is a continuation of my learning. Not new skills

Cross-reference with what you used last year if you are not a startup.

  1. Add the costs to it

From the initial list, I then create a table with everything on my list. Some of it will be free, or won’t have a cost. For what does have a cost, I state the value either in the monthly or annual column. I use a spreadsheet for this.

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This is an example and not real figures or a full list.

I add up the monthly list, and then the annual list. Make sure you multiply the monthly costs by 12, and add that to the annual sub-total. I put the calculation into work out the annual costs.

There is a column for when things get paid, this will help in the next section.

Remember to cross-reference with last year’s expenditure.

With Sole Traders and training – be careful and if in doubt get advice. If it a new course and skill that you are learning, you can not claim it as an expense. Always check before you add it.

  1. Monthly budget and forecasting

Both Google sheets and Microsoft Excel have business budget templates to suit an individual style and need. If you are really adventurous you can create your own. The basics of this spreadsheet would be a section for income, and then outgoings.

Google business budgets bring up all sorts of examples and templates. The one I used below is from Vertex42

Using the information above, add it to the

budget spreadsheet. All the expenses go on the monthly sheet. The categories are based on the HMRC categories, but from this, it is easy to see when money is going out and what is forecasted.

At the bottom of the sheet, you can add a calculation in for taxes. The bottom line is your net income (not shown on the example).

  1. Actual expenditure

Copy the planned budget worksheet. If you are using Excel, you can right click to bring the dropdown box up. Click on move or copy, click copy and ensure it is in the same workbook. Rename the worksheet page to actual, and update it on a monthly basis.  Cross-reference it with your book-keeping software if you have it, and you are then able to see at a glance how you compare with your budget as well where any big expenditures are in the future.

You can also work out what your overheads are per month, as a result, calculate the cost per unit/per hour that you sell on average. The cost per unit/hour will reduce the more you sell.

For example, you have a monthly overhead of £300. You sell 30 units at £20 each.

300/30 = £10 per unit/per hour

If your sales increase to 60 units but costs don’t, then the cost per unit will decrease

300/60 = £5 per unit/per hour.


Please remember, I am not an accountant or book-keeper. This is based on what I do each year to budget and plan for the year ahead.

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