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How Do I Create a Small Business Budget?

Greg Swanson

If you’re wondering how do I create a small business budget, the good news is you don’t need to be an accountant to get it right. With just a few simple steps, you can track your money and plan for growth.

Quick answer: Create a small business budget by estimating income, listing expenses, setting spending limits, and tracking your progress monthly.

Step 1: Estimate Your Income

Look at Past Revenue: Use past months or industry averages to estimate monthly earnings.
Include All Sources: Don’t forget side projects, retainers, or product sales.
Be Conservative: It’s better to underestimate income than overpromise.

Step 2: List Your Expenses

Separate Fixed and Variable Costs: Fixed includes rent and subscriptions; variable includes supplies and shipping.
Don’t Forget Hidden Costs: Taxes, transaction fees, and marketing spend add up fast.
Track Everything: Use software or spreadsheets to record every dollar.

Step 3: Make a Monthly Plan

Create Categories: Assign limits to each area like advertising, inventory, and travel.
Adjust as Needed: Your budget should evolve with your business.
Review Monthly: Compare budget vs. actual and adjust where needed.

Effective small business budgeting tips include reviewing your numbers regularly and keeping a buffer for surprise expenses. Even if you’re just starting out, startup budget planning gives you more control and confidence.

Updated: August 11, 2025

Why does a small business need a budget?

A budget helps small businesses control spending, plan for growth, and avoid financial surprises.

What should be included in a small business budget?

Include income estimates, fixed and variable expenses, savings goals, and a review system to track performance.

How often should I update my business budget?

Review and update your budget monthly to stay accurate and reflect any business changes or new expenses.

What tools can help me create a business budget?

Tools like QuickBooks, Wave, Excel, or Google Sheets can help you track income and expenses easily.