How to Budget for Your Business: A Step-by-Step Guide for Entrepreneurs
- Jayme Lach
- May 28
- 3 min read
If you’re running a business without a budget, you’re basically flying blind. A solid budget is more than just numbers on a spreadsheet - it’s your financial roadmap, helping you plan for growth, avoid surprises, and make confident decisions. Whether you're just starting out or looking to take more control of your finances, learning how to budget for your business is one of the smartest things you can do.
In this guide, we’ll walk through how to build a business budget that’s practical, flexible, and aligned with your goals, plus a free resource to help you get started.
Why Business Budgeting Matters
A business budget gives you a clear picture of what’s coming in, what’s going out, and what’s left over. It helps you:
Plan for upcoming expenses
Avoid overspending
Make smart investments
Set realistic financial goals
Prepare for taxes and unexpected costs
Without a budget, it’s easy to overspend, miss opportunities, or end up scrambling when bills are due.
Step 1: Know Your Income
Start by figuring out how much money your business brings in each month. If your income is consistent, great! If it varies (which is common for freelancers, service providers, and small shops), take the average of your last 3–6 months or look at your lowest-income month to be extra cautious.
Be sure to include all revenue streams:
Product sales
Client retainers
Freelance gigs
Passive income (like digital products or affiliate links)
Pro tip: Use accounting software like QuickBooks or Wave to pull income reports quickly.
Step 2: List All of Your Expenses
Break your expenses into two categories: fixed and variable.
Fixed expenses stay the same each month:
Rent or coworking space
Software subscriptions
Insurance
Internet or phone bills
Variable expenses can change monthly:
Inventory or materials
Shipping costs
Contractor pay
Marketing and ads
Office supplies
Don’t forget to include annual fees (like website hosting or LLC renewals) and quarterly taxes. Set money aside monthly for those so they don’t sneak up on you.
Step 3: Set Profit Goals and Savings Targets
Once you know your income and expenses, calculate your expected profit (income minus expenses). From there, decide what you want to do with that profit. Some smart ideas:
Save for taxes (30% is a good rule of thumb)
Build an emergency fund
Reinvest in your business (courses, equipment, or marketing)
Pay yourself
If your profit margins are tight or negative, don’t panic - this is your opportunity to adjust before things get worse.
Step 4: Monitor and Adjust Monthly
Budgeting isn’t a one-time task. Review your numbers every month and adjust as needed. Maybe a new client came in or a software subscription increased - your budget should reflect those changes.
Set a recurring calendar reminder for a 30-minute “money date” at the start of each month. Check in on your income, review what you spent, and make sure you’re still on track with your financial goals.
Step 5: Use Tools to Make Budgeting Easier
You don’t need fancy spreadsheets or financial degrees to stay on top of your budget. These tools can help:
QuickBooks Online – for full-service accounting and reporting
Relay Bank – to separate funds by category with multiple checking accounts
Wave – a free option for basic accounting and budgeting
Notion or Google Sheets – for simple, customized budget tracking
Find a system you’ll actually use and stick with it.
Final Thoughts
Creating a budget may feel intimidating at first, but it’s one of the most empowering things you can do as a business owner. When you know your numbers, you can make decisions with clarity, invest in your growth, and stop stressing about every dollar.
Want Help Getting Your Finances in Order?
Download our free DIY Bookkeeping Health Checklist - a simple, practical tool to assess your current money systems and take the first step toward a budget that works for you.
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