How to Create a Business Budget in 5 Easy Steps To help you stop feeling like you’re pouring money down the drain each month, here’s a simple step-by-step guide for creating your own basic business budget. 1. Create a Spreadsheet for Income and Expenses Before you dive into collecting your revenue and expense details, you need a method of organizing all this financial information. You can either create your own template for this in Google Sheets or Excel or — better yet — find a free template online. Free templates for tracking small business expenses are a dime a dozen! Here are a few places to look: Google Sheets has several monthly and annual business budget templates. Just login and search the template library for one that suits your needs. Microsoft Office has several free and premium budget templates available. Capterra’s small business budget template is a favorite among small business owners, and very user-friendly. If this is your first business budget, go with a simpler template in Google Sheets or Microsoft Excel — whichever you’re most familiar with. The goal is to add organization to your finances, not increase stress and leave you feeling overwhelmed! You can always upgrade to a more complex spreadsheet or budgeting system later on, but starting simple will set you up best for more immediate success. 2. Outline Your Expenses When first starting out with your business, you should have a clear understanding of the costs involved in running it. This should include everything from rent and utilities to supplies and digital tools. Be sure to include setting a percentage aside for estimated quarterly taxes (usually around 20%) and any recurring fees involved in running your business. If you run your business from home and don’t have a brick and mortar location, keep in mind that you can write off a portion of your rent or mortgage payments as a business expense. If you have a dedicated room for your home office — not a shared space like a corner of your bedroom — you can write off that square footage as a business expense to help you save on taxes. To make tracking this even easier, you can split the transaction within the Lili app. This works for your internet bill too! 3. Estimate Your Revenue Once you know your expenses, it’s time to take a look at your revenue (the actual money you’re making). If you’re already in business and have been established for a while, you should already have a strong estimate of your monthly and annual revenue. Use that as a starting point and make note of any projected growth over the coming months. If you’re creating this budget in order to start a new business venture, your expenses should set the precedent for how much revenue you need to actually make money.

Budgeting does take a lot of work, and you may feel you don’t have the time or resources for it, but maintaining a budget for your business can actually save you both time and money!

Budgeting involves looking at your revenue and expenses and determining where each and every penny will go on a monthly, quarterly, and annual basis. Even the smallest of businesses with just a single business owner needs a budget to keep track of their bread and butter.

A business budget is not as scary as it sounds — it’s simply a tool for helping you keep track of where your money is coming from and going to! It is a specific, organized plan that helps you understand where your money is coming from, where it’s going, and what (if any) is left over.

Whether you’re just starting your business or have run a thriving operation for years, without a business budget you’re almost guaranteed to lose money somewhere.