Let’s face it—budgeting isn’t the most exciting part of running a small business (unless you love spreadsheets like us), but it is one of the most important. A solid budget helps you keep spending in check, plan ahead, and avoid those “where did all the money go?” moments.
Whether you’re just starting out or trying to grow, here’s how to build a realistic, easy-to-follow budget that works with your business—not against it. And if you want to make sure you're not just surviving but actually making money? Consider using the Profit First approach (more on that below).
1. Start with Your Goals
What’s the big picture? Whether it’s growing your customer base, launching a new product, or just staying afloat, knowing your goals will help shape how you spend and save.
Once you know your goal, put a ‘number’ on it. E.g. Goal is to provide my family with a holiday away each year with a cost of $10,000.
Then, break it down to what you need to earn each year to make that goal happen.
2. Know What’s Coming In
List every source of income—sales, services, retainers, even side gigs. If you’re new, make your best guess, but be conservative. Better to be surprised by more income than less.
3. Track Every Expense (Yes, Every One)
Separate your spending into:
· Fixed costs – rent, salaries, subscriptions
· Variable costs – supplies, shipping, ads, travel
Be honest and detailed. Even those $15 monthly tools add up!
4. Try the Profit First Approach
Instead of the usual “sales – expenses = profit” formula, Profit First flips it to: Sales – Profit = Expenses
Here’s the idea: you take a percentage of your income as profit first—then use what’s left for expenses. It’s a simple but powerful mindset shift that helps make sure your business stays truly profitable, not just busy.
Start small if you need to—setting aside even 1–5% of income can make a difference.
To make it easier, many business owners use separate bank accounts for:
· Profit
· Owner’s pay
· Taxes
· Operating expenses
Not sure how to set it all up? We can help you build a Profit First system that works for your unique business. Whether you’re starting from scratch or just want a sense check, reach out—we’re here to guide you through it.
5. Plan for the “What Ifs”
Build a cushion into your budget (10–15% extra if you can) for unexpected costs—because something always pops up.
6. Check In Often
Review your budget monthly (or even weekly if things are tight). Are you spending too much? Are you still setting aside profit? Regular check-ins help you stay in control and stress-free.
7. Forecast the Future
Use your actual data to project income and expenses for the next few months. Factor in slow seasons, launches, or major purchases.
8. Adjust As You Grow
Your budget should evolve with your business. Landed a new client? Raising prices? Great - time to tweak your plan and reallocate accordingly.
Bottom Line: Budgeting doesn’t have to be stiff or scary. When you approach it with purpose - and maybe a Profit First mindset—you take control of your money and your future. Even small shifts in how you manage cash can make a big difference in your long-term success.
