Business budget: what it is and what it means

The business budget is the document in which a company translates its expectations for revenue, costs, investments and cash into orderly numbers over a one-year time horizon. It is not a tax requirement or an accounting record: it is a management tool, owned by the business owner. The budget lives before the year starts and is used to decide on hiring, investments and prices: it does not report what happened, it plans what is expected to happen.

Distinctive: management tool
Distinctive: owned by the business owner
Essential: expectations for revenue, costs, investments and cash
Essential: orderly numbers
Essential: one-year time horizon
Constant: not a tax requirement
Constant: lives before the year starts

Glossary

Business budget

The document in which a company translates its expectations for revenue, costs, investments and cash into orderly numbers over a one-year horizon.