Budgeting for Next Year

For many creatives, “budget” is one of “Don’t Go There” words. But we’re going there, and it will be a worthwhile experience.

In its simplest terms, budgeting is goal-setting with numbers. And those numbers are based on your projections. As you gain business experience, you’ll get better at projecting.

Whenever you make a projection, justify it. Pretend that your budget is part of a business plan that you’re going to present to venture capitalists. They’ll ask you about your assumptions – “What makes you think you can bill $75,000 next year, Mr. Freelancer?” Your answers should show that your assumptions are realistic.

In this budgeting article freelance designer and photographer Martha Retallick helps you prepare a hypothetical income statement for your business.