Budgeting

To ensure your business doesn't go bankrupt, we have to make sure there is money for all your business expenses. The easiest way to do this is by making budgets. Calculate how much money you need for every subject and track how much money you have spent and remaining on that subject.

Budgeting Tools

There are a couple of different ways to create and manage your budget. You can use budgeting apps like Flow and Mint, which help automate tracking and provide visual insights into your spending. Alternatively, you can use a spreadsheet application like Excel or Google Sheets to create a custom budget that fits your specific needs.

Some banks also support built-in budgeting features that allow you to categorize expenses and set spending limits. Check with your bank to see what budgeting tools they offer.

The Budget Account System

One effective budgeting method is to create different bank accounts or budget categories for each type of expense. Here's how it works:

• Create separate accounts or budget categories for each expense type (equipment, marketing, travel, etc.)
• Calculate how much money you need for each category per month
• Allocate funds to each account at the beginning of each month
• When you spend money, use the matching account to see how much is left for that category
• All extra money you make goes to a savings account
• Use savings to top up the other accounts/budgets every month

This system ensures you always know exactly how much money is available for each expense category, preventing overspending and helping you stay organized.

Growing Your Business

It's crucial to make sure you earn more money than you spend, ensuring your company grows. If you spend less than you have budgeted, you save on that subject for more considerable expenses later on—for example, equipment purchases or larger investments.

You might need to adjust your budgets as your company develops. For example, when you hire people, you'll need to add payroll expenses to your budget. Regular budget reviews help you adapt to changes in your business needs.

Creating Your Budget

To get started with budgeting, follow these steps:

1. List all expenses: Write down all your monthly expenses, both fixed (rent, subscriptions) and variable (marketing, equipment)
2. Categorize expenses: Place each expense in the correct category (equipment, marketing, travel, studio, professional services, etc.)
3. Calculate totals: Count up the total for each category and your overall monthly expenses
4. Set up tracking: Create your budgeting system using your chosen tool (app, spreadsheet, or bank feature)
5. Allocate funds: Divide your income among the different budget categories based on your calculations
6. Track regularly: Monitor your spending throughout the month to stay within budget

Budget Categories

When creating your budget, consider these main categories:

• Equipment and Software: DJ gear, production software, computers, instruments
• Marketing and Promotion: Social media ads, PR campaigns, photography, graphic design
• Travel and Accommodation: Flights, hotels, ground transportation, meals while traveling
• Studio and Production: Studio rental, mixing/mastering, session musicians, distribution
• Professional Services: Legal fees, accounting, management, agent commissions
• Operating Expenses: Office supplies, phone, internet, insurance, bank fees
• Savings: Emergency fund, future investments, equipment upgrades

Staying on Track

Budgeting is an ongoing process, not a one-time task. Review your budget regularly—at least monthly—to see how you're doing. Compare your actual spending to your budgeted amounts and adjust as needed. If you consistently overspend in one category, you may need to either increase that budget or find ways to reduce spending.

Remember, a budget is a tool to help you make informed financial decisions. It should be flexible enough to adapt to your changing needs while providing enough structure to keep you on track toward your financial goals.