Who can predict the future? Nobody really, but that is exactly what business owners try to do. Their predictions are contained in budgets. These financial statements attempt to list a business’ likely sales, costs and profits. Setting a budget is a difficult and time-consuming process. In a new business it is an almost impossible task, as there are no previous trading results to base estimates of future income and expenditure on.
We all budget, maybe not formally but at least in our heads. Imagine your first year at university. Your living costs could top £5,000, with your student loan needing to cover rent, food, books and entertainment.
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