Enterprise budgets

An enterprise budget projects the costs and returns of growing and selling a particular crop or livestock over a period of time. It comprises of a simple listing of income and expenses, based on a set of assumptions.

An enterprise budget is a physical plan because it indicates the types and quantities of production inputs and output; as well as a financial plan because it assigns costs to all inputs used in producing the enterprise.

Some of the uses of an enterprise budget are itemizing costs and returns (income), listing inputs and production practices, evaluating the financial efficacy of the enterprise, estimating benefits and costs of fundamental changes in production practices (for example, investing in irrigation), providing a foundation for a total farm plan, and supporting applications for credit.