Using a Budget and KPIs
to Improve your Agency Performance.

Your expense forecast should reflect both your historical spending in a given category and the effect that changes in your business (i.e. growth!) will have on a given expense category. 

By labeling your expenses using these four categories, you’ll start to understand the drivers behind each of your expenses.  

1. Fixed Expenses – expenses like rent are easy to forecast. 
2. % of Sales – expenses that change based on your volume of clients, like travel and gifts. Take a look at your historical rate and apply it to your forecasted sales.
3. % of Payroll – expenses that change based on the size of your staff, like phone bills and computers. Again, using the forecasted rate applied to the budgeted payroll produces a forecast for these expenses.
4. Budgeted Expenses – expenses like legal or accounting fees can be forecasted based on past experience. 

Now, when you make changes throughout the year–adjusting your sales forecast, hiring new people–you’ll see those changes automatically reflected in your budget.

For step-by-step guidance and a downloadable budget template, check out our E-Book, Ask Your Budget.