How to Conduct a Year-End Budget Analysis for Your Flower Farm

Oh no! Not another budgeting blog!

I promise this is the final piece of the budgeting puzzle, and it’s a crucial one. Having a well-structured budget is an essential tool for keeping a realistic grip on your flower farm’s finances throughout the season.

In our previous blogs, we guided you through creating a budget that answers three key questions:

• What do we know?

• What do we guess?

• What do we hope?

Now, we’re taking it one step further with a Budget Analysis—a process that compares last year’s educated guesses to actual numbers. This isn’t about profits specifically (we’ve covered that in our blog on Profit Analysis); instead, this is about uncovering the “why” behind your financial decisions. By performing a budget analysis, you’ll refine your budgeting skills and set a stronger foundation for the coming year.

New to budgeting? Check out our guides for First-Year Flower Farmers and Second-Year Flower Farmers and Beyond to build a strong foundation before tackling this analysis.

Preparing the Budget Analysis

To get started with your budget analysis, you’ll need two essential items:

1. Last Fiscal Year’s Budget (prior year’s budget)

2. Last Fiscal Year’s Profit & Loss Statement
   It’s important to have up-to-date and accurate bookkeeping for this process to be worthwhile.

Once you have these documents ready, you can download the Budget Analysis Worksheet by clicking the button below for your preferred program: Excel or Numbers.

After downloading the worksheet, follow these steps:

1. Enter Your Prior Year’s Budget
   Start by filling in the budgeted numbers you created last year.

2. Enter Your Actual Numbers
   Pull the actual figures from your Profit & Loss statement and input them into the worksheet.

3. Review Automatic Calculations
   The worksheet will calculate the variances (dollar differences) and percentage differences between your budgeted and actual figures automatically.

With this data in place, you’re ready to move on to the next step: analyzing the results.

Analyzing the Budget Analysis

The process from here is straightforward: go down the columns and compare the differences between what you guessed in the prior year’s budget and what actually occurred, according to your Profit & Loss statement.

Notes for Comparing Variants and Percentages

While it may seem redundant to look at both variants (the dollar difference) and percentages, there’s a purpose behind it.

• Variants: Show the dollar difference between your prior year’s budget and actual performance.

• Percentages: Help put that dollar difference into context, showing the relative significance of each variance.

The monetary difference alone might not always give a full picture—percentages clarify whether the variance is minor or something that needs closer attention.

Look for large percentage differences, typically over 5-7%, as these indicate areas that warrant further investigation.

How Well Did You Guess at Last Year’s Budget?

This step is about asking “what happened” and “why” for each variance.

For example:

• If Revenue Increased:

  • What did you do differently?

  • Why was it effective?

• If Revenue Decreased:

  • Did you adjust your approach?

  • Were there uncontrollable circumstances, like weather or a shift in market demand?

Work section by section to assess the results and note down your observations. The insights gained here will help you refine next year’s budget.

What Can You Do Differently for a More Accurate Budget?

Now that you’ve uncovered the “why” behind your variances, it’s time to use this information to improve your future budget.

Ask yourself:

• Sales Focus: Which sales outlets performed best? Which need more attention?

• Variety Analysis:

  • Which flower varieties were top-sellers?

  • Which didn’t meet expectations or failed entirely?

• Expense Adjustments:

  • Did any costs increase unexpectedly, like bouquet sleeves or compost?

  • Are there areas where you could cut back without compromising quality?

Completing your budget analysis gives you a clearer picture of what worked and what didn’t. Use this newfound understanding to create a more accurate and actionable budget for the coming fiscal year.

Ready to take your financial tracking to the next level? Check out our Bookkeeping for Flower Farmers blog for tips on keeping your books organized and actionable insights that will make your budgeting process even smoother.

We are looking forward to sharing more blooms with you soon.

Graham & Jessica