Like all budgets, website expense budgets are plans. They are spending plans, activity plans, sales plans, web plans, all linked to the disciplines of careful projection and resource allocation. The math of the expense budget is very simple. The content takes work, but not the design of the table. It's built on common sense and reasonable guesses, without statistical analysis, mathematical techniques, or any past data. The mathematics are also simple--sums of the rows and columns.
In the example below, rows are horizontal, columns are vertical. Each line of expenses occupies a row, and months and years occupy columns. The source spreadsheet hides the monthly columns for March through October for the purpose of illustration, so you can see the annual total without scrolling. The other months are there, even if they don't show.
The total expense row sums the individual expense rows. The annual expense column sums the months for each row, including the total rows.
Sample from Web Strategy Pro.
As you develop a budget, think of it as educated guessing. Consider your plan objectives, your sales and marketing activities, and how you'll relate your spending to your strategy. Remember as you budget that you want to prioritize your spending to match the priorities set in sales and target marketing. The emphasis in your strategy should show up in your actual detailed programs.
The Contribution Margin
The illustration shows a complete budget, that relates sales and cost of sales and expenses to the contribution margin, which is a good measure of business value. The contribution margin subtracts specific identifiable project-related operating expenses from the gross margin. It is somewhat like a project-specific profitability.
Summary
Budgeting is hard for many people because they are unsure of how to project the future. Don't worry, if you know your business, you can give an educated guess of future expenses. Remember, one thing harder than forecasting is running a business without a forecast.
