In this article, we'll tell you why you're making an operating budget. We've also added an example so you can get started yourself right away.

Why are you making this budget?

An operating budget gives you insight into the future of your company. Then we are mainly talking about its profitability. With this budget, you list the expected turnover and costs.

This has a number of advantages:

1. You know how much turnover you need to cover the costs.
2. You know how much turnover you need to make a profit.
3. You can make adjustments when reality differs from expectations.
4. You can immediately see when you need more money to cover the costs. You can already anticipate this.
5. Need more money? Then a loan can be the solution. Some financiers ask for the operating budget in order to take out the loan. Because you've made the budget, you're speeding up the application process.

Part of the financial plan

The operating budget is part of your company's financial plan. This financial plan is again part of the business plan. This shows whether your company is financially viable. For you, as an entrepreneur, it is nice to provide insight into this. But even if you are looking for financing, some parties will ask for such a budget. The bank in particular sets these requirements when applying for funding.

Operating budget example

Revenue Year 1 Year 2 Year 3Net turnover € 435,000€ 495,000€ 550,000 Purchase € 210,000€ 243,000€ 272,000Gross profit € 225.000€ 252.000€ 278.000

Cost Year 1 Year 2 Year 3Staff € 33,000€ 33,000€ 42.000 Rental property € 10,000€ 12,000€ 13,000 Marketing € 25,000€ 30,000€ 35,000 Insurance € 15,000€ 17,000€ 20,000 Unforeseen € 5,000€ 5,000 Depreciation € 15,000€ 15,000Total costs: € 103.000€ 112.000€ 130,000Tax €33,750 €38,500 €45,000Net profit €88,250€ 101,500€ 103,000

Tips for making an operating budget:

• Create multiple scenarios and you'll know what to do if costs suddenly increase or turnover decreases due to circumstances.
• Staff costs are approximately 30% higher than the gross salary. This is due to pension and employer costs.

What is the difference between a liquidity budget and an operating budget?

At first glance, the liquidity budget and operating budget are quite similar. Yet they both have a different purpose. The operating budget is an overarching and annual overview of the expected income and costs.

The liquidity budget is much more about cash requirements on a monthly or quarterly basis. This budget shows how much cash the company has. And when costs from turnover can be paid. Exactly what about the You can read the liquidity estimate in this article.

Operating budget for financing?

We see the operating budget as an added value for the entrepreneur. By providing insight into your future, you can quickly respond to 'unexpected' situations. This budget will not be requested when you makes an application to Swishfund.

What do you need when applying? 10 minutes of your time and an overview of your business transactions over the past 12 months. We look at the past year and the current situation. Based on this, we determine the options for financing. Within 24 hours of your request, we will call you with an informal proposal. Once approved, the loan can be paid out the same day.