How to create a budget for your small business

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As a small business owner, you'll know how important budgeting is in helping to give you insight and control over your business.

Creating and managing your small business budget can help you:

  • Track your income and manage expenses so you can see how much money you need to make to cover costs

  • Help manage your cash flow, so you can avoid getting into a tight situation

  • See how much money you can afford to put back into the business

  • Save for an emergency budget

Coronavirus might mean that your business is facing some uncertain and worrying times, and so now can be a good time to start looking into managing your cash flow and tracking your finances closely.


Monzo Business helps you get better visibility and more control over all your money.

If you have a Monzo current account– you can sign up straight from the app 👇

If you don't have a Monzo account already – download the Monzo app to sign up for a free current account. Then head to your account and tap 'Apply for a business account.' 👇

You can see exactly how much you and your team are spending on things like bills, expenses and transport. And even set a budget for each category, if you want to. Add receipts, notes and tags, plus easily search and filter transactions.

Read more about Monzo Business here.


We've put together a short guide on how to create a small business budget yourself. But if you're looking for an easy way to create a budget using Monzo, you can read more about Monzo Business here. 💪

First, look into how much money your business brings in 📈

This can be done on a monthly basis, and is often a good place to start when you create your first business budget.

Start with sales figures by looking at your profit and losses. This can be done by taking away any business expenses from your income.

  • Income is revenue. This is how much money you're making from selling products or services. Make sure you look at both regular income (like any contract work your business might be doing) as well as expected income. This is a forecast of future income that you're likely to get.

  • Expenses are costs. This is how much money you're spending on business costs. This can be anything from salaries (including insurance, taxes and benefits) to your marketing budget to a fixed cost like rent.

Your business is making a profit if you have more revenue than business expenses. If you have more business expenses than revenue, you're making a loss.

Setting a business budget can help you figure out how you can create a profit or max out on one if you're already profitable.

If you're just starting out, look at industry averages so you can see what the typical monthly income is.

Put together a balance sheet 🖊️

Creating a balance sheet using a spreadsheet can be a helpful next step in helping you figure out what your business is worth.

A balance sheet will break down:

  • What your business owns (this can be things like any assets or equipment you've bought)

  • What you owe as a business (expenses that haven't yet been paid like taxes or loans)

The balance sheet will show what you owe versus what you own.

Once you've got those numbers, create your budget ✅

You'll now have insight into your business income (recurring and expected), your variable expenses and your fixed expenses.

You'll know what your business owns and what it owes.

The next stage is actually creating your small business budget:

  1. Forecast how much you expect your revenue to be

  2. Add up fixed costs (like rent and loan payments)

  3. Subtract fixed costs from your revenue as a whole

  4. Calculate variable expenses (like bills)

  5. Subtract variable expenses from revenue as a whole

Once you've set our your budget you can figure out how much money you can put back into the business to help improve it or become profitable. You'll also have insight into what your cash flow will look like in the future, to make sure you'll avoid running out of money.


Break down your spending and create a budget to manage your money using Monzo Business.

If you have a Monzo current account– you can sign up straight from the app 👇

If you don't have a Monzo account already – download the Monzo app to sign up for a free current account. Then head to your account and tap 'Apply for a business account.' 👇