Managing finances is a big part of owning a business. It is imperative to know where your expenses are going and whether you are making enough revenue to cover those overhead costs.

One of the biggest mistakes business owners have made throughout the centuries is that most of their earnings go towards their business expenses. If they don’t have anything left over after those expenses have been paid, they don’t have anything left to invest as far as improvements go. All that is required to make your business irrelevant is if a competitor makes an investment that allows them to offer something you cannot.

A rule of thumb to follow when you are a business owner is that your earnings should be increasing every month. If it means attracting more clients so your income can go up, then that’s what it takes. But attracting more clients isn’t something that comes for free, either – so what can a responsible business owner do?

Creating a business budget is certainly a great place to start! Establishing a budget on a weekly, monthly, even quarterly basis will allow you to afford the resources that you need to grow. It also doesn’t hurt to know that a budget can also help you earn more profit for yourself, even when you are working the same hours every month.

The first thing you need to do to create a functioning business budget is to figure out how much your business earns every month. You can achieve this by calculating your sales figures, as well as investments coming in from additional shareholders – if applicable. Even though this is a personal risk on your part, you are certainly free to add any extra income that you might have into your monthly revenue figures.

Determine fixed overhead costs is the next step. These are expenses that you need to pay every month; things like, utility payments, employee payroll, supplies, etc. The easiest way to figure out what costs are fixed and what costs are mutable is to go to your FreshBooks report. From there, you can easily find your bills and the amount they cost every month.

You can also try to predict one-time expenses, but be forewarned that this is an ability that comes with time. As your experience continues to build upon itself, you will be able to factor in one-time purchases better than ever before. While some expenses are unexpected, you can plan for a wide variety of others expenses – like a business retreat that has been in your mind for months!

Don’t be afraid of start creating a monthly business budget because the benefits can be liberating, even though you’re restricting how much you spend. Above all, your budget should give you a greater sense of control over your business day to day. Before log, you should be able to see how your business is running more smoothly than before.