How to Create a Project Budget
What is a Budget?
A budget is an estimate of income and expenses for a set period of time in the future. You can create a budget for your entire organization or individually for each of your projects/programs. Budgets are meant to be revised and re-evaluated periodically as needed.
Why are Budgets Important?
Budgeting is important because it helps you maintain control over your finances. A project budget will allow you to visualize your finances for the project and help you assess what you can afford, serving as guidance to keep you out of debt. Budgets will also help you make strategic business decisions when it comes to programming. If you want to add an additional performer to your project, your budget will help you project whether you can make a profit, break even, or will lose money by making that change. As a non-profit, these projections could also help you determine your fundraising goals for the year.
Pentacle has provided a Project Budget Template meant for artists of budget sizes under $1Million. This template is ideal for artistic entities that have never created a budget before and those who are in need of a revamp. It’s important to remember that a budget works best when used alongside other financial statements such as an income statement and a cash flow statement.
Use the Pentacle Template to Get Started
How to Use this Template:
- Fill in your company name in cell A1.
- Fill in the name of your project in cell A2.
- Fill in the name of your project in cell B2.
- Fill in your projections for each line item.
- Ideally you want your total Net Income number in cell B63 to be a positive number to show a profit or zero to break even! A negative number will indicate a loss and you will need to depend on additional funding and/or your cash reserve to make up for the loss.
- Additional Tips:
- If you have QuickBooks, you can enter your budget into QB and easily generate a Budget vs. Actual Report to track how well you are following your budget throughout the year.
- Creating a budget for each of your projects will help you put together your Annual Operating Budget.
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Pentacle’s nextSteps is supported, in part, by public funds from the National Endowment for the Arts, the New York State Council on the Arts with the support of Governor Andrew M. Cuomo and the New York State Legislature, and the New York City Department of Cultural Affairs in partnership with the City Council. Pentacle receives private support for nextSteps from the Booth Ferris Foundation, the Howard Gilman Foundation, the Rockefeller Brothers Fund, and the New York Community Trust.