Build a Budget
Follow along as we take you step-by-step through the budget-making process for a local pizza restaurant. Learn the basics of building a detailed business budget in Excel or Google Sheets just like the pros!
Meet Your Instructor
Cofounder & CPO, Pareto Labs
Nic Barnhart is a cofounder and Chief Product Officer at Pareto Labs. Prior to that he was in finance and analytics at ZipRecruiter and head of operations at a health tech startup acquired by Aetna. Earlier in his career, Nic started a business to teach kids basic finance concepts and founded a nonprofit organization to fund efforts to combat human trafficking. He earned a B.S. from the United States Air Force Academy and an MBA from The Wharton School at the University of Pennsylvania.
Learn the basics of budgeting, what it is and why it is important.
02 Setting Up The Model
Understand the structure and line items that go into a budget and the importance of selecting the right assumptions that drive the revenue and expense estimates.
03 Top Down: Estimating Revenue
Create assumptions for monthly sales using high level estimates and generate formulas to determine the top line budget.
04 Top Down: Estimating Cost of Goods Sold
Create assumptions for the cost of goods sold using estimated margin percentages and generate formulas to determine the gross profit budget.
05 Top Down: Estimating Operating Expenses
Create assumptions for the operating expenses using estimated percentages of sales and generate formulas to determine the operating income budget.
06 Bottom Up: Estimating Revenue
Estimate monthly sales based on detailed inputs and assumptions about where customers come from, how many there will be, and how much they will spend.
07 Bottom Up: Estimating Cost of Goods Sold
Estimate the monthly gross profit based on detailed assumptions about the costs of producing each type of product and delivering it.
08 Bottom Up: Estimating Operating Expenses
Estimate the operating income by including detailed inputs about the anticipated costs for every overhead expense line item.
09 The Variance Report
Learn how to build a monthly report that compares the actual business performance to the budgeted performance so you can tell if you are on track.