A guide at Inc. discusses the basic ins and outs of setting a budget for your business. A budget tells you how much money you have available to spend in order to hit your goals. It encompasses revenues, costs, and of course profits for a given time period. Always favor caution with your estimates, but try to be especially realistic with revenues, the business’s lifeblood. As for costs, there are three kinds: fixed costs, which do not change and include things like rent; variable costs, which might change according to sales volume as seen in the expense of raw materials to make products; and semi-variable costs, fixed costs that can be adjusted over time such as salaries.
You can learn more and in the fullest depth at the full article: http://www.inc.com/encyclopedia/businessbudget.html