Creating a Budget for Your Landscaping Business Can Be an Intimidating Task

HOWEVER, IT IS A NECESSARY TOOL FOR BUSINESS PLANNING AND IMPROVING YOUR FINANCIAL PERFORMANCE.

Your budget should be treated as a living document and adjusted for any changes you couldn't anticipate.

When making a budget for your landscaping business, the best place to start is with your previous year's income statement.

This will give you a reasonable benchmark to help determine what your projections will be in the future. Every budget should include projections for each category in the income statement: revenue, the cost of goods sold, expenses, and taxes to determine net income.

You may also want to consider departmentalized budgeting.

This is where you create a separate budget for each profit center, such as maintenance, installation, and irrigation.

When budgeting, consider any cost increases, industry trends, and changing customer buying habits.

Also, set a reasonable goal for the New Year to help you reach your desired net income.

Revenue should include any costs related directly to the sale of product, such as sales people’s salaries, commissions, benefits, advertising, and marketing.

Operating, or indirect expenses, should include rent or mortgage, property tax, utilities, insurance, general administration costs, personnel expenses, and payroll taxes.

Finally, divide the numbers out monthly to reflect the seasonality of the business.

This will ensure you are accurately projecting your expenses and net income for the New Year.