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Page 3 of 10
Budgeting
2. Expenditure Budget
Once you have drawn up your sales budget, you can begin to work out your costs.
VAT-registered businesses should calculate costs excluding VAT.
2.1 What fixed costs will you have?
In other words, which costs must you pay, no matter how much you sell? This would include:
- Rent, rates and insurance.
- Phones, Internet and computer costs.
- Interest charges.
- Maintenance and repairs.
- Electricity, gas and water rates.
- Staff wages and expenses.
- Advertising.
- Administration (eg accountants' fees).
- Depreciation of equipment, furniture and other fixed assets.
2.2 What variable costs will you have? Which costs will grow or diminish in line with sales?These could include:
- Raw materials.
- Distribution.
- Advertising.
- Extra staff costs, for overtime or temps.
2.3 Are any of these fixed or variable costs likely to change?
Labels: Reduce Costs
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