{"id":4776,"date":"2018-08-06T13:27:33","date_gmt":"2018-08-06T17:27:33","guid":{"rendered":"https:\/\/www.sage.com\/en-us\/blog\/?p=4776"},"modified":"2026-02-23T10:10:29","modified_gmt":"2026-02-23T15:10:29","slug":"how-to-create-a-business-budget","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-us\/blog\/how-to-create-a-business-budget\/","title":{"rendered":"How to create a business budget"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-us\/blog\/category\/money-matters\/\" class=\"entry-header__link\">Money Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tHow to create a business budget\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2018-08-06T13:27:33-04:00\">August 6, 2018<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"How to create a business budget\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-us\/blog\/how-to-create-a-business-budget\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n<\/header>\n\n\n\n<div class=\"wp-block-post-author has-dark-background-color alignfull\">\n\t<div class=\"container\">\n\t\t<div class=\"col\">\n\t\t\t\t\t\t\t<div class=\"co-authors\">\n\t\t\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-us\/blog\/author\/johannabrown\/\">\n\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"40\" height=\"40\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2019\/07\/Johanna-headshot2-350x350.jpg\" class=\"entry-author__image\" alt=\"\" \/>\t\t\t\t<span class=\"entry-author__name\">Johanna Brown-Lyons<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n<p>Starting and growing a business is an exciting but challenging prospect. While you may be a skilled leader or have a great idea for a product or service, the financial side of your operation is not always something that comes naturally. Even after you secure funding, you aren\u2019t done yet. You need to correctly allocate your funds for best results. If you don\u2019t have a budget, you could end up spending more than you take in. You need to anticipate and plan for your future needs to maintain a strong cash flow.<\/p>\n\n\n\n<p>Similar to&nbsp;<a href=\"https:\/\/www.sage.com\/en-us\/blog\/how-to-write-a-business-plan\/\">your business plan<\/a>, a budget sets a framework that helps you move toward your goals. However, unexpected events can throw a wrench in your plans. It\u2019s important to realize that your budget is never static. There will be unforeseen changes, and you will need to make adjustments along the way.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-where-to-start-with-your-budget\"><strong>Where to start with your budget<\/strong><\/h2>\n\n\n\n<p>If you are just beginning the process of&nbsp;<a href=\"https:\/\/www.sage.com\/en-us\/blog\/how-to-start-a-business-in-a-weekend-with-just-an-idea-and-a-smartphone\/\" target=\"_blank\" rel=\"noreferrer noopener\">opening a business<\/a>, a budget can help you estimate the total startup costs. A realistic budget also tells you the profit you can expect to bring in. Your initial budget should include all your revenues, costs, cash flow, and profits. After accounting for costs, you can determine if you have any funding left over for capital investments.<\/p>\n\n\n\n<p>Small business owners often think they don\u2019t need a business budget because they keep rough financial numbers (income and expenses) in their head. The problem with this approach? They\u2019re likely to adjust the numbers to paint a more ideal view of business financials \u2014or their recollections aren\u2019t accurate. Committing budget numbers to a document and working with it through the year ensures accuracy (and, yes, honesty).<\/p>\n\n\n\n<p>While budgets need to be calculated at least once a year, it may be better to\u00a0<a href=\"https:\/\/www.youtube.com\/playlist?list=PLG3VAatOz36k--3-6Hp_gd4_d8Nw6K2UY\">update it once per month, or even dail<\/a>y. <strong>Checking your budget regularly can help you make more accurate estimates based on the current status of your sales pipeline. You can also identify areas where you are at a risk of overspending and cut back before you go over your allocated totals.<\/strong><\/p>\n\n\n\n<p>One of the reasons you should review your budget is you can see the impact your decisions have made in the short term. You may discover you aren\u2019t spending enough on marketing. Or you may be spending too much on certain marketing channels that aren\u2019t generating a high return on investment. It\u2019s important to consider your sales and referral channels. Additionally, you may be able to make adjustments to invoicing so payments can be sped up, enhancing your cash flow.<\/p>\n\n\n\n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Get your cash flow template<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Our easy-to-use template will help you understand the cash coming in and going out of your business so you can make smarter decisions.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-8fd32b11-050f-4828-89a5-aae504126966\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Download now<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"800\" height=\"450\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/01\/GettyImages-561609507-1024x576-1-e1672917871162.jpg\" class=\"single-cta__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/01\/GettyImages-561609507-1024x576-1-e1672917871162.jpg 800w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-don-t-overlook-often-forgotten-expenses-or-revenue\"><strong>Don\u2019t overlook often-forgotten expenses or revenue<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>To make sure you don\u2019t miss any expenses, use bank statements, credit card statements, and receipts to assemble a comprehensive list.<\/li>\n\n\n\n<li>Commonly missed expenses include bank\/financial fees, interest, local and sales taxes, and home-office costs like utilities and rent\/mortgage.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-prepare-for-the-unexpected-with-a-strong-budget\"><strong>Prepare for the unexpected with a strong budget<\/strong><\/h2>\n\n\n\n<p>Business moves at a quick pace, and sudden changes, such as a client cutting its budget or reducing an order,&nbsp;can harm your cash flow. You need to assess your budget to determine how the loss of revenue will impact profits&nbsp;and how long you expect the effects to last. Do you need to reduce marketing expenses or hiring costs until you can recoup the loss? Your budget needs to be flexible.<\/p>\n\n\n<div class=\"gate-ab515c6e-7e90-4c2f-a67e-113872516e8b wp-block-sage-subscription-form\"><div class=\"gcdc-loader gcv2-loader\"><\/div><\/div>\n\n\n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Small business survival toolkit<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Get your free guide, business plan template, and cash flow forecast template to help you run your business and achieve your goals.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-aee5a8c2-281d-42bb-8da2-eda5b62f63c6\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Download your free toolkit<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t<div class=\"single-cta__downloads\">\n\t\t\t\t\t\n\t\t\t\t\t10,548 readers have downloaded this toolkit\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1327127856-1440x810.jpg\" class=\"single-cta__image\" alt=\"Female hands working on a laptop\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1327127856-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to our Sage Advice Newsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Get our latest business advice delivered directly to your inbox.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-ab515c6e-7e90-4c2f-a67e-113872516e8b\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1073797282-1440x810.jpg\" class=\"single-cta__image\" alt=\"Working from home with tea in hand\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1073797282-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Starting and growing a business is an exciting but challenging prospect. While you may be a skilled leader or have a great idea for a product or service, the financial side of your operation is not always something that comes naturally. Even after you secure funding, you aren\u2019t done yet. You need to correctly allocate [&hellip;]<\/p>\n","protected":false},"author":795,"featured_media":2914,"menu_order":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"footnotes":""},"categories":[43],"tags":[110,299,152,155],"business_type":[40],"lilypad":[],"context":[],"industry":[],"persona":[96],"imagine_tag":[209,230,231],"coauthors":[645],"class_list":["post-4776","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-money-matters","tag-accounting-101","tag-cash-flow","tag-starting-a-business","tag-staying-competitive","business_type-small-business"],"sage_meta":{"region":"en-us","author_name":"Johanna Brown-Lyons","featured_image":"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2017\/10\/customersurveys.jpg","imagine_tags":{"209":"Accounting","230":"Small business","231":"Start up business"}},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice US","distributor_original_site_url":"https:\/\/www.sage.com\/en-us\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/4776","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/users\/795"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/comments?post=4776"}],"version-history":[{"count":1,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/4776\/revisions"}],"predecessor-version":[{"id":35736,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/4776\/revisions\/35736"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/media\/2914"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/media?parent=4776"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/categories?post=4776"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/tags?post=4776"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/business_type?post=4776"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/lilypad?post=4776"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/context?post=4776"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/industry?post=4776"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/persona?post=4776"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/imagine_tag?post=4776"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/coauthors?post=4776"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}