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Business Budget Template: What to Include

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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Setting a budget for your small business can prevent excessive spending and put you on a path toward profitability.

An effective budget would show you how much you need to generate in sales to cover costs, as well as how much you can afford to reinvest in the business. Additionally, you could use a budget to figure out when you’d have the means to hire employees.

It may seem like a daunting task to comb through your business’s finances but sitting down to create a budget for your small business would be time well-spent. Continue reading to understand what budgeting entails and how to find a business budget template to get started.

Why does your business need a budget?

A business budget puts your monthly expenses in writing, including your office lease payments, travel costs, website hosting fees, marketing expenses and the cost of supplies. Documenting these regular costs would help you set aside money each month to cover the bills and spend only what is left over.

A budget would give you a detailed look at where your money is going. You would be able to see how much you need to earn in sales to not only break even but become profitable.

As your business changes over time, your budget can help you be flexible in your spending. If a big, one-time expense comes up, you could look at line items on your budget to see where you could make cuts to cover the unexpected purchase.

Your budget should include all business expenses, even the small ones, so you don’t underestimate your financial needs. In the next section, we’ll discuss how to find a budget template for your business.

Creating your business budget

Before writing your business budget, there are a couple of financial statements you need to understand related to how your business earns and spends money.

Profit and loss statement

A profit and loss statement, or income statement, would illustrate whether your business is making or losing money. You would need to subtract your expenses from your income to determine this. If your revenue exceeds your costs, then your business is profitable. But if costs are higher than revenue, then you’re likely making a loss.

When doing the math, include all recurring income and expected income in your total revenue. Same with expenses – include recurring and fixed costs as well as one-off purchases. Also include payroll, debt repayments and depreciation of business assets in your total expenses.

Once you’ve determined if your business is making a profit or a loss, you could decide how to move forward with your budget. You could set up the budget so you save money to reduce spending, or invest in growing your profits.

Balance sheet

Your balance sheet would show your assets, liabilities and overall worth of your business. To find the difference between what your business owns and owes, you would need to subtract monthly liabilities from monthly assets.

Your total assets should include the value of everything the business owns, such as real estate or equipment, as well as money in your business bank account and outstanding invoices.

Your total liabilities should be comprised of any loans or other business debt, bills that have not yet been paid and taxes due in the near future.

The balance sheet allows you to see all assets and liabilities to figure out the net worth of the business. This information would help shape your budget.

Writing your budget

The information on your financial statements would inform your business budget. Consider creating a spreadsheet separating your costs into two categories to track spending: one-time expenses, like equipment, and recurring costs, like monthly rent and utility bills.

You could create an individual sheet for each month, or combine data from each month on one sheet to track your yearly spending. Your spreadsheet should also include your projected sales, revenue and profit so you can compare your costs to your income.

Once you’ve filled out your spreadsheet, you could adjust the numbers to illustrate various scenarios. For instance, you could evaluate how increasing or adding a certain expense would impact your revenue or profit.

Choosing a business budget template

After becoming familiar with your monthly expenses and income, you would be better prepared to determine what’s essential to your budget. You could create a weekly or monthly budget, or both, to keep your spending on track.

Here’s an example of what your budget may look like:

Various websites offer online templates, often for free. Here are a few available to download:

  • Monthly budget template from QuickBooks – This template works with Microsoft Excel and Google Docs. It tracks monthly expenses and one-time expenses on a single sheet to calculate total monthly costs. This spreadsheet is designed for new businesses looking to estimate initial startup costs.
  • Monthly budget template from Smartsheet – This template works with Microsoft Excel or the Smartsheet platform. It includes sheets for tracking one type of income source and one type of expense as well as cash transactions each month. Smartsheet also provides multiple templates for various needs, such as a 12-month budget, a specific project budget and a first-year budget.
  • Money management template from Vertex – This template works with Microsoft Excel and Google Sheets. It records spending and income to create a yearly budget. Vertex’s template includes worksheets for service-based and product-based businesses.
  • Small business budget from Capterra – This template also works with Microsoft Excel. Capterra’s budget tool allows you to input your yearly spending goals to calculate what your financial activity should look like each month. You can update your spreadsheet with your business’s actual monthly results to see if you’re on track to meet your goals.
  • Small business budget management templates from PDFConverter.com – PDFConverter.com provides links to 15 downloadable Microsoft Excel spreadsheets. The templates are designed with specific budgeting goals in mind, like budgeting for marketing or manufacturing expenses, setting a business travel or event budget or creating a rolling budget to forecast future spending.

When filling out your business budget, most templates would require you to determine the number of months the budget will cover. Then, you would enter your costs and income into their respective fields on the spreadsheet. An embedded formula would automatically populate total amounts based on the information you entered.

Setting a budget and sticking to it

A premade template would take much of the legwork out of making your business budget. But you would still need to interpret those numbers to make changes within your operation.

You could refer to your budget to adjust variable expenses to offset any anticipated changes in your cash flow. You should also check your budget before taking on a major expense, like purchasing equipment or expanding the business, to make sure it fits within your current spending plan.

For startups, a business budget can be crucial. New business owners often underestimate startup costs and setting a budget can help you stay on track. You also may have to submit a budget as part of your business plan when applying for loans or investor funding.

Any business can benefit from budgeting, as it would help you make strategic decisions about the future of your company. You could use your budget to explore different scenarios, plugging in expenses to see what your business can afford.

Your business budget is a flexible document and can change as your business evolves. Maintaining a budget as you grow would help you understand your spending habits and revenue patterns, so you can feel comfortable making purchases that benefit the business.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Small Business

How Tariffs Affect Small Businesses

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Tariffs are duties charged on imports, and U.S. buyers pay the costs. Small businesses that bring in imported products can either absorb the expense or pass it along to their customers. When tariffs increase, as they have on certain goods imported from China, as well as the import of steel and aluminum products, countries often retaliate by increasing their own tariffs on American goods arriving on international shores.

Small businesses bear the brunt of tariff hikes and the resulting trade wars. “Small businesses are especially hard-pressed because they don’t have the reserves to tap into to wait for more stable circumstances,” said Davidson College economics professor Shyam Gouri Suresh.

We’ll help you understand how tariffs affect small businesses and what you can do to protect your firm when unexpected costs threaten growth.

What is a tariff?

A tariff is a tax that a country levies on imported goods and services. Tariffs increase the price of imports, potentially making them less competitive or desirable compared to domestic goods and services. 

A tariff is typically charged as a percentage of the value of the product that a buyer must pay a foreign exporter. In the U.S., importers must pay tariffs at 328 ports of entry, which the U.S. Customs and Border Protection controls. Companies that pay the tariffs to bring goods into the country likely pass that cost on to customers. The paid tariff goes to the Department of Treasury and makes up a portion of the federal government’s revenue.

Tariff increases

A country may introduce a new tariff or increase existing ones in order to restrict trade from particular countries or reduce imports of specific types of products, which is what the U.S. Trade Representative decided to do to combat unfair trade practices with China. The U.S. Chamber of Commerce implemented tariffs of its own on certain imports of aluminum and steel for national security reasons. Trade talks continue between the United States and China as of press time, but at least $300 billion worth of Chinese imports face tariffs, some as high as 25%.

The effects tariffs have on small business

These increased tariffs and resulting trade wars have cost American businesses big and small $38 billion, according to Tariffs Hurt the Heartland, a coalition of businesses and trade groups that oppose the tariffs. Automakers, tech companies and agricultural producers have been especially hard hit, but the National Retail Federation has also compiled profiles of affected small business owners from music teachers to gift shop owners.

“They have to either swallow this increase in price, or they have to pass that price increase on to the end consumer,” Gouri Suresh said.

Passing on the costs of tariffs: A closer look

Big businesses are in a better position to absorb higher costs than small businesses. Large companies can operate on smaller margins, while small businesses don’t have as much of a cushion and eventually must raise prices.

“As they increase prices, they may start losing their customer base,” Gouri Suresh said. “It’s a really difficult bind to be in. It favors bigger businesses that have deeper pockets who can ride out this trade war.”

Some firms may not be able to pass costs onto customers if they compete with businesses unaffected by high tariffs, said Katheryn Russ, an economics professor at the University of California, Davis. Small businesses likely have to take a blow to their profit margins if competitors don’t have to make similar price increases because of tariffs.

“If all businesses are having to raise their prices in a particular product space, then that’s different,” Russ said. “And this does seem to be a broad-based cost increase for U.S. firms.”

U.S. producers facing Chinese tariffs conversely have had to drop prices to remain competitive in China. For instance, soy farmers in the U.S. significantly reduced prices to avoid passing on cost increases to Chinese consumers.

Businesses that stand to benefit from tariffs

Tariffs on foreign goods should benefit domestic producers making similar products, as their products would be less expensive than those taxed at a high rate. Those producers may be able to raise their prices knowing the demand is higher, Gouri Suresh said.

For instance, American steelmakers are reportedly seeing bigger profits from higher demand, increased prices and a boost in production. But the rush to production may backfire as it meets a global economic slowdown.

How to prepare your business for economic changes

The U.S. government’s actions have been unpredictable, which makes it challenging to plan and prepare for increased tariffs, Gouri Suresh said. Tariffs have historically been implemented slowly, but the recent increases have not reflected the gradual nature of past rate hikes.

“The problem with what’s happening with the most recent trade war is the numbers are flying every day,” he said.

Tariffs have also affected industries differently, making it difficult to compare the impact across companies, Russ said. “It’s hard to offer specific advice. We just don’t know right now what’s going to happen,” she said. “I guess…just be ready for anything.”

Despite the unpredictability of the trade war, there are steps you could take to better position your business for economic changes.

Cut back where you can.

To minimize the price increases that you’d have to pass on to customers, consider cutting back your operating costs as much as possible. This could allow you to run the business on a tight budget when needed.

Consider an industry change.

If you can easily alter your business concept, you may find that an adjacent industry is less affected by tariffs than the one in which you currently operate.

“Being nimble is going to be a really big boon for businesses if they can turn on a dime and reconsider what they’re buying and what they’re selling,” Gouri Suresh said.

Apply for a tariff exemption

Several categories of goods are exempt from tariffs, such as items that are necessary for health and safety. Goods are exempt on an industry-wide basis, and large groups of lobbyists and business owners must typically work together to seek exemptions.

Companies affected by recent tariffs may request to be excluded from Section 301 tariffs on Chinese goods and Section 232 steel and aluminum tariffs. Thousands of companies have filed exemption requests with the Office of U.S. Trade Representative, claiming they are unable to find comparable goods outside of China or that it would be extremely costly to do so. Approvals for these requests, so far, have been low.

The bottom line on how tariffs affect small businesses

U.S. tariffs on Chinese goods are hurting some American firms more than the intended target, Gouri Suresh said. The widespread impact on U.S. businesses and consumers may not be sustainable and tariffs could soon decrease. But if not, high prices on imported goods may become the new normal.

“In the long run, either the tariffs end and the trade war ends…or everybody learns to live in this new world,” he said.

In the meantime, small businesses will likely continue to feel the effects of tariff increases. It may be best for entrepreneurs to hunker down and operate as efficiently as possible until stable conditions return, Gouri Suresh said.

“When things go bad, they’re the ones who are going to suffer first,” he said. “But they are also the ones who will benefit the most when things turn for the better.”

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Small Business

Etsy Alternatives: 5 Options for Creative Businesses

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Etsy is an online marketplace for independent sellers of handmade, vintage and craft products. For a fee, creative entrepreneurs can open their own ecommerce shop on the Etsy platform to sell goods and services. But it’s not the only platform artists and craft makers can use to sell their wares. Amazon Handmade, Depop and Zibbett offer similar marketplaces, while eBay is for sellers of all types of goods, not just handmade ones, and has size on its side. Or, you could rely on your own ecommerce site through a provider like Shopify.

We’ll break down the Etsy alternatives so you can determine the best way to share your handmade products.

Selling on Etsy: When to stay and when to go

Stay: Business owners who don’t yet have a customer base.

Etsy has more than 2,300 active sellers on the platform and more than 42,000 buyers; according to Jesse Tyler, marketing director of Classy Llama, an ecommerce agency based in Springfield, Missouri, entrepreneurs just starting out can benefit from that built-in audience that Etsy provides.

Sellers have the opportunity to be featured on the site, as Etsy handpicks shops to highlight throughout the marketplace. If selected, you could benefit from being exposed to hundreds of potential customers. Sellers could also promote their listings through paid ads on the site.

However, Etsy’s sellers are also bound to its policies and must keep up with changing rules to rank high in search results on the site. For instance, Etsy announced in July that it would encourage sellers to offer free shipping for orders totaling at least $35. Shops that don’t make the change to offer free shipping won’t receive priority placement in Etsy search results.

Stay: Those with limited time for site setup.

For creative entrepreneurs looking to sell goods online, Etsy could be an attractive starting point. Etsy provides tools to set up an online store, taking the burden off the business owner to build a site from scratch, Tyler said.

“If you’re using Etsy, it’s about leveraging what already exists,” he said. “There’s a lot less responsibility and a lot less work to get set up.”

If you’re not tech savvy or don’t want the hassle of constructing an ecommerce site, Etsy provides tools to quickly set up a shop. You’d need to provide information about your business and products, as well as how you want to accept payments, and Etsy would populate a website for you to manage. From there, you could rearrange items on your page to customize your store.

Etsy charges fees for listing and selling items — a $0.20 listing fee, 5% transaction fee and 3% plus $0.25 for payment processing — but in exchange Etsy takes on the technical aspects of running an ecommerce site.

Sellers must also adhere to Etsy’s policies, including restrictions on the type of products you can sell and shipping requirements, as mentioned earlier.

Stay: Entrepreneurs with limited marketing budgets.

Generating an audience for a new ecommerce site can be challenging, Tyler noted, especially if you don’t invest in advertising. Selling on Etsy would give you access to the high volume of people who visit the marketplace.

“If you’re a small seller and you’re not spending money on ads, you’re going to be better off sending them to Etsy and letting Etsy do the work,” he said.

Associating the business with Etsy could also increase the credibility of your brand, Tyler said. People may be more willing to interact with a business that appears on a trusted platform, like Etsy. Kickstarter would be a similar example, he said, and these platforms are often an effective “marketing engine” for new businesses.

The longer you sell on Etsy, the more reviews you would collect from customers. Positive reviews can boost your ranking within the Etsy marketplace, increasing the exposure of your shop, said Tyler. A positive reputation on Etsy can be immensely valuable to sellers.

“If you’re doing well on Etsy, it might not ever make sense to leave,” he said. “Your reviews and repeat customers, those are things that are kind of hard to replace if you go.”

Consider an Etsy alternative: Small businesses with greater ad budgets.

If you want to invest in advertisements, it would be best to direct customers to your own website rather than an Etsy domain, Tyler said. Instead of using Etsy’s paid ad campaigns, consider other, free ways to increase your Etsy ranking.

A new site would require you to make a significant marketing investment to gain traction. But if you were already planning to advertise your business, it could make sense.

Consider an Etsy alternative: Own your customer base.

When selling through your own ecommerce business, you could collect valuable information from your customers, such as email addresses. Etsy doesn’t allow sellers to collect email addresses from buyers to conduct further communication. But as a business owner, obtaining addresses allows you to directly connect with customers and generate new leads.

Operating outside of a marketplace like Etsy would allow you to control your communication with current and potential clients.

5 Etsy alternatives for crafty entrepreneurs

Etsy is considered a consumer to consumer (C2C) marketplace, meaning it serves as a neutral platform to sell goods. Etsy facilitates transactions and takes a percentage of sales, and other marketplace platforms do the same. On the other hand, software as a service (SaaS) providers give users their own URL and control of their domain in exchange for an ongoing fee.

Whether you’re looking for another marketplace in which to sell your products or a site to host your own store, here are a few Etsy alternatives to check out for your small business.

 EtsyShopifyAmazon HandmadeDepopZibbeteBay
Subscription feeNoYesNo, for 40 items or lessNoYesYes
Starting costListing fee: 20 cents/item

Transaction fee: 5%

Payment processing fee: 3% plus 25 cents
Subscription: $29 to $299/month

Credit card fee: Starting at: 2.7% plus 0 cents (in-person rate); 2.9% + 30 cents (online rate)
Referral fee: $1 or 15% of the total sale price, whichever is higherFlat fee: 10% on each item sold

Payment fee: 2.9% plus 20 cents
Subscription: $5 or $6 per month, per channel (2 minimum), plus channel feesSubscription: $4.95 to $349.95/month

Insertion fee: 5 cents to 30 cents/item

Final value fee: 2% to 10%
Free trialNoYesNoNoYesNo
Choice of payment optionYesYes, for a feeYesNo (PayPal only)YesYes

1. Shopify

Shopify is an ecommerce platform that allows business owners to create a cloud-based online store. Users can buy their own domain name or connect an existing URL to their store. Shopify’s store builder tool makes it easy to design a site if you don’t have web development experience.

New users can try Shopify for free for 14 days. Shopify requires users to purchase a monthly subscription, offered starting with its entry plan:

  • Basic Shopify subscriptions start at $29 per month and include an ecommerce website and blog, space for unlimited products and full-time customer support. Basic plans include account access for two people and a 64% shipping discount. Shopify charges a fee to accept online credit card payments — 2.9% plus $0.30 for the Basic plan.

As you advance to more expensive subscription tiers, available site features increase, and credit card processing fees decrease.

2. Amazon Handmade

The Amazon Handmade marketplace is designed for artisans and craft makers who sell products online. Sellers must submit an application before setting up a shop. Upon receiving approval, you would choose your business name, payment method and provide your credit card information. You can then list products in categories such as artwork, beauty and personal care, clothing, jewelry and watches, among others.

You would need to register for a Professional selling plan, which is free, though if you plan to list more than 40 items in your shop, you would be subject to a $39.99 monthly fee. All sellers would owe a fee on each item sold. Amazon charges either 15% of the total sale price or $1, whichever is higher.

3. Depop

Depop is an app-based marketplace for creatives with a social component. Users can see what products others are liking, buying and selling. As a seller, you would create a Depop profile that would be featured in the app. You would need to provide a description of what you’re selling and your policy on shipping and returns. Sellers need at least four items to list when launching an account. Depop uses PayPal to facilitate transactions and you would need to connect a PayPal account for Depop to verify before you can accept payments.

Although sellers don’t have to pay listing or subscription fees, Depop charges a 10% flat rate on each item sold. Because Depop partners with PayPal to conduct secure transactions, sellers are also subject to a fee of 2.9%, plus $0.20 for payments. You can ship through Depop and choose whether you or the buyer would be covering shipping costs. You can generate a shipping label through the app, then drop off the item at a post office or with another courier.

4. Zibbet

Zibbet allows creative entrepreneurs to sell in the Zibbet marketplace, as well as through other sales channels — for example, Zibbet can connect to other platforms, including Etsy, letting you manage your sales in one place. Zibbet gives users the ability to customize their shop, list unlimited products and run sales and promotions. If you’ve connected your Zibbet store to other sales channels, all order details would be imported to Zibbet for you to manage, and any changes made to your store through your Zibbet dashboard would be updated on all channels.

Zibbet offers a 14-day free trial for new users. After that, the platform costs $5 per month if you choose to receive a yearly bill, or $6 per month if you’re billed monthly. Each channel that’s connected to your Zibbet account — there’s a two-channel minimum — would cost an additional $5 or $6, depending on your billing schedule. Zibbet doesn’t charge listing or transaction fees, but you would be subject to fees from other channels. For example, if you connect your Zibbet store to Etsy, you would owe Etsy’s fees.

5. eBay

eBay offers a personal or business account, depending on what you plan to sell. A business account is best if you want to sell large amounts of items, handmade products or items that you bought with the intention to resell. Similar to other platforms, eBay allows you to create listings for items you want to sell, including shipping options and how customers will pay you. eBay’s Seller Hub provides tools like sales tracking to help business owners manage and grow their online store.

eBay charges a monthly subscription to run a store, which offers more listings and lower fees than selling without a store. There are a range of subscription tiers, including its entry plan:

  • Starter subscriptions costs $7.95 per month, or $4.95 per month if you sign up for a yearlong plan. The Starter plan also comes with 100 free listings, with each additional listing costing $0.30 per month. eBay also charges all sellers a percentage of each final sale. The final value fee ranges from 2-12% for Starter subscribers. Sellers also get a monthly allocation of “zero insertion fee listings,” which are items you could list for free.

Combining Etsy and alternatives

You can open both an Etsy shop and an ecommerce store on another platform, and it could be a smart strategy to do so, said Tyler. For instance, large enterprise companies typically sell through multiple channels, such as retail stores and their own store or website, he said.

You could take advantage of Etsy’s built-in audience while working on your own ecommerce site. You would likely have more freedom to design and customize your own domain, though you would need to make sure it appeals to customers. People can be hesitant to trust a new site, Tyler said, and it could help if you also have a presence on Etsy.

“If you set up a shop yourself and it doesn’t look great and there’s not a lot of reviews, people might be apprehensive about buying from it,” he said.

The bottom line

There are several places for business owners who want to sell handmade or craft products online to set up shop.

Creating your own ecommerce site on a hosting platform like Shopify would give you an independent domain for your business. You wouldn’t be associated with a larger marketplace and you wouldn’t need to compete with other sellers on the same platform.

But it takes time and commitment to bring people to a new website, and you may find that consumers can be wary of a startup ecommerce brand.

“A Shopify site might bring disappointment,” Tyler said. “You have to do a lot of work to bring traffic and build an audience.”

A marketplace with name recognition, like Etsy, could be a better starting point for new entrepreneurs. Etsy provides tools to simplify the process of setting up an online store. Though you would have to pay listing fees and face high competition, your brand could benefit from the exposure that Etsy provides, Tyler said: “If you haven’t built an audience, this is a great, safe place to do that.”

Still, keep in mind that you could sell products through Etsy and a secondary ecommerce site to see which is best for your small business. As Tyler put it, “it doesn’t hurt to have both.”

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.