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First, start calculate the necessary cost to start-up the imagined business.
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Determine the cost to operate the business. This mostly will include utilities.
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A business must estimate profits to limit their expenses in order to generate profits in the end.
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This is a important category in a budget because it states the necessary revenue in order to keep the business running. If this goal is not met, the business may enter a decline.
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Payroll may need to be considered if your business involves employees. They need to be paid and will quit if they go unpaid.
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The time range of a budget is usually 1 year that can be further divided into quarters and months.
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It is important to determine if expenses are fixed or variable. Fixed expenses are mostly the same every time and often out of the owner's control. Variable expenses can fluctuate and are more in the owner's control.
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Referring to your budget can be beneficial when making decisions. It can provide informative information about your business financial goals.
