What is a Small Business Budget?
The budget is basically a tool that allocates expenses overtime. It acts like an alarm to alert the entrepreneur if expenses are exceeding their limits. There are generally two categories of expenses, fixed and operating expenses. When creating a budget, there is usually more emphasis put on operating expenses, because they tend to fluctuate with operating activities. Fixed Expenses and Small Business Budgeting Fixed expenses generally don’t fluctuate overtime. Since they remain somewhat constant, incorporating them into the budget is relatively easy. Often times fixed expenses may not even be incorporated into the budget since they don’t fluctuate with operating activities. Some examples of fixed expenses are: • Rent • Utilities • Insurance • SalariesOperating Expenses and Small Business Budgeting Operating expenses, sometimes known as variable expenses, usually fluctuate with operating activities. In a manufacturing environment, they tend to increase as production increases. In a bus
