1-Using word processing software of your choice, type the text and apply appropriate design elements.

a.Type on an A4 page size.

b.Ensure that the page is in portrait.

c.Apply margins at 2 cm on the left and right.

d.Do not apply paragraph indentation.

e.Insert relevant illustrations, photographs and other illustrative material for design purposes and ensure they are centred.

f.Only apply colour to the images and graphics.

g.Do not have too much white space.

h.Type in Arial, 11pt font.

i.Apply left alignment.

j.Make headings bold, 12pt and underlined.

What is a budget?

A budget is a forecast of revenue, expenditure and profit. Most budgets are revised annually.

What does it achieve?

There are two (often overlapping) reasons for producing a budget. One is to persuade potential investors that your company is a good bet. The other one is to plan your business finances - how much money do you have and how do you plan to use it? How much revenue do you need to generate to achieve your target profit? Is your business plan viable or does it need adjusting? In retrospect, did the year pan out the way you planned, or did something go wrong?

How to approach a budget

First, find out how your accounting software deals with budgets. It's far more efficient to use the same package for accounting and budgeting. Next, meet your accountant to plan how to structure the budget. Arrive prepared, with a chart of accounts and a list of informed questions. Take copious notes.

Traditional budgets are very difficult for start-ups and firms with a short history, because there is little or no historic data. Revenue is particularly problematic, because no matter how carefully you have planned, it's impossible to predict the future. There are two main approaches to budgeting:

The projections approach

Here you enter projected costs and projected revenue, and calculate projected profits from these. This is reasonable and rational if the company has several years of relatively stable history to project from. If it's a new company, such a budget is likely to become an exercise in denial and wishful thinking.

The required profits approach

An alternative method is to enter projected expenses, and then calculate how much profit you require, and how much you think you can actually generate.

Eventually this should be enough to pay your salary and provide a return on your investment in the company. However, it might be realistic to plan for a loss in the first year or two, and only a small profit for a year or two thereafter.

Having settled on a number, you now add expenses to profit to come up with your required revenue.

Turn this number inside-out. Is it realistic? Is it achievable? Instead of guessing wildly how many widgets you may be able to sell, or how many hours you hope to bill, you can now soberly assess whether you will be able to reach your targets. Don't have 10,000 billable hours in the year? Can't afford enough machinery to make a million widgets? Go back and adjust the business plan.

Once the company is liquid, determine your salary based on what you would be earning if employed in a similar job, and your return on investment based on the interest you would receive if investing outside the business.