Payroll is really the most important of your expenses, right? Unless you’reworking all alone, when things get fuzzier, the worst thing that can happen is missing payroll. So that’s a number that should really be in your plan, among the simple basic numbers. I hope you agree.

Here too the math, the spreadsheet elements, are pretty simple. It doesn’t take advanced analysis or specialized equations. If you have past data and history, it becomes very easy (which is not to say that projecting future pay increases is an easy part of business, but the math and estimation is relatively simple).

This is just one easy way to do organize the data. Lots of people add sophistication to it, like dividing the payroll up into departments, or estimating how many people are in each functional area, then the average pay per person, then multiplying. For now, though, I want to keep things simple as we go.

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Tim BerryTim Berry
Tim Berry

Tim Berry is the founder and chairman of Palo Alto Software and Bplans.com. Follow him on Twitter @Timberry.