Plan budgets and forecasts

Decide what you want the business to achieve financially, then build a realistic plan for the sales, expenses, and resources required. Use a budget to establish your intended financial plan and a forecast to update what you currently expect as conditions change.

Base your assumptions on actual results, seasonal patterns, known commitments, and planned activities. Include the timing of customer payments, taxes, equipment purchases, loan repayments, and owner withdrawals when planning cash needs.

Consider what would happen if sales were slower, customers paid late, or costs increased. Identify the actions you would take in those situations, and update your forecasts as new information becomes available.