You started your business with a vision.
You took the risk.
You put in the work.
You’re seeing the rewards.
But here’s the problem—making money is just step one, managing it is step two.
You see, it’s not just about how much you make—it’s about how much you keep and how well you use it.
That’s where budgeting comes in. It is the foundation of financial planning for business owners.
In this guide, I’m going to break down the key steps to building a budget that will give you clarity, control, and the confidence to scale your business
Let’s dive in…
The Budget Problem
Many business owners run their operations without a defined financial strategy.
Everyone knows their top-line revenue (it is good coffee shop conversation).
Yet nearly no one knows their expenses like they should.
They reinvest in the business but fail to monitor their profitability.
They anticipate having leftover funds at the month's end but do not actively plan for it.
The result?
Cash flow issues, unnecessary debt, and missed opportunities for growth.
If this sounds familiar, don’t worry—you’re not alone. But the good news is that fixing it is simpler than you think.
The Three Buckets of a Business Budget
Think of your business finances in three buckets:
Fixed Costs – These are your non-negotiable expenses like rent, payroll, and insurance. They don’t change much month to month.
Variable Costs – These are expenses that fluctuate, like marketing, advertising, and materials. The key is to control these so they align with your revenue.
Profit & Distributions – This is what’s left over. The mistake many business owners make is treating profit as an afterthought. Instead, you need to build it into your budget from the start.
You have to know more than just your baseline expenses.
You need to know what expenses are set in stone (fixed) and what expenses could be cut at any time (variable).
Understanding that provides the framework to know what needs to stay in your business and what can come out as distributions.
Step-by-Step: How to Build a Budget That Works
Know Your Numbers
Start with your revenue: What are you bringing in each month?
Track every expense: Where is your money actually going?
Identify trends: Are expenses growing faster than revenue?
Set a Profit First Mentality
Instead of waiting to see what’s left at the end of the month, set a fixed percentage of revenue for profit and pay yourself first.
Plan for Taxes
Taxes are often a business owner’s biggest surprise expense. Allocate a percentage of revenue each month so you’re never caught off guard.
Create Spending Limits
Set clear limits for categories like marketing, office supplies, and software. This keeps spending intentional and aligned with your goals.
Review & Adjust Monthly
A budget isn’t static—it’s a living document. Review it each month and adjust based on your business performance.
Common Budgeting Mistakes
Mistake #1: Not Separating Business & Personal Finances
Keep your business and personal accounts separate. Mixing them creates chaos and makes budgeting nearly impossible.
Mistake #2: Overestimating Revenue, Underestimating Expenses
Be conservative with revenue projections and realistic with expenses. Hope is not a financial strategy.
Mistake #3: Ignoring Emergency Funds
Every business needs a buffer. Aim for 3-6 months of expenses in an emergency fund to protect against slow periods or unexpected costs.
A strong budget doesn’t limit you—it empowers you:
To Reinvest
To Scale Further
To Take Out Distributions
To Feel Confident In Your Next Move
Let me be clear ~ You cannot grow a great business without first knowing your numbers.
Whether your business is just starting out or already thriving, taking the time to create and maintain a solid budget will be one of the best decisions you make.
If you are a business owner doing more than $1,000,000 in income and looking for a team that specializes in you schedule a call with our team.
Get in Touch With An Advisor
Frequently Asked Questions
Here are some answers to questions received regarding budgeting for business owners:
1. How much should I pay myself as a business owner?
There’s no one-size-fits-all answer, but a good rule of thumb is to start with at least 30% of your profit and adjust based on business performance.
2. What percentage of revenue should I allocate for taxes?
Set aside 25-30% of revenue for taxes to ensure you’re covered, especially if you don’t have automatic withholdings.
3. How often should I review my budget?
At a minimum, review your budget monthly. A quarterly deep dive can help adjust for major shifts in revenue or expenses.
4. What if my revenue is inconsistent?
If your income fluctuates, create a baseline budget based on your lowest revenue month to ensure essential expenses are always covered.
5. What’s the best tool for budgeting my business finances?
There are great options like QuickBooks, Xero, or even a simple Google Sheet. The key is to choose one and use it consistently.
*Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.
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