An enterprise budget is a projection or estimate of the costs and returns of producing a product (enterprise). For example, an organic corn and soybean producer is interested in developing both an organic corn budget and an organic soybean budget for the coming year.
Enterprise budgets are usually prepared on a “per unit” basis. For example, a crop enterprise budget is usually computed for an acre of production. Costs and returns for the entire crop can be calculated by multiplying the budget coefficients by the number of acres that will be produced. A budget for beef cattle is computed on a “cow/calf” unit. Information for the entire herd is computed by multiplying the coefficients by the size of the herd.
Enterprise budgets are very useful tools. Some of the uses of enterprise budgets for your business are to project the:
- Most viable enterprises
- Most profitable combination of enterprises
- Expected production
- Expected profits
- Expected capital and cash needs
- Expected labor needs
- Expected levels of purchased inputs
- Expected feed needs
- Expected machinery or facility needs
Enterprise budgets for a wide range of specific plants and animals that have been developed by universities across the nation are also available.
Revised March, 2019.