You're not alone if your small business is being held together by good wishes and duct tape financing. Entrepreneurs have had the crushing weight of the thought, “We're broke again,” even as revenue from sales comes in.

You don’t have to be a finance major, or a magician, to get mastery. You just need a budget that works with you, not against you.

Think of a budget like the GPS of your finances. You may be traveling fast, but down the wrong road, if you don’t have one. But with it, you know where the money comes from, where it goes, and how to make intelligent decisions on where to develop, without panic every month.

In the following pages, I will outline how to construct a basic, functional, and sustainable small business budget.

Step 1: Know Your Revenue

A solid budget starts with knowing your income.
If you’re unsure about how much money is coming in, it’s like trying to drive with your eyes closed.

Here’s how to get clear on your revenue:

• Start with your sales history.
  Look at the last 6 to 12 months. Are there trends? Do sales rise during certain times of the year? Are things generally improving or declining?
  
  
• Make conservative projections.
  If you're just starting out and don’t have much data, use expected sales, pricing, or any contracts you've lined up to estimate. The golden rule: be cautious. It’s safer to underestimate than to assume big numbers and fall short.
  
  
• Account for fluctuations.
  If your sales vary month to month, base your budget on the slower periods. That way, you’re covered during down times and not scrambling to make ends meet.
  
  

Once you have a clear picture of your income, you can confidently plan your spending, manage your expenses, and aim for real profitability.

Step 2: Identify Your Expenses

Once you’ve nailed down your income, it’s time to take a clear-eyed look at your expenses.
Most business costs fall into two main categories:

• Fixed expenses:
  These stay pretty steady month to month, think rent, employee salaries, insurance, and software subscriptions.
  
  
• Variable expenses:
  These change depending on what’s going on in your business. Things like marketing campaigns, sales commissions, inventory, travel, or client-related costs.

Why does this matter?
Categorizing your expenses gives you a better handle on your cash flow. You’ll quickly see which costs are non-negotiable and which ones you can adjust when things get tight.

Want to dive deeper? I break this down further in another video where I walk through the different types of business expenses and how to manage them smartly.

Step 3: Set Profit Goals

This is where a lot of small business owners go wrong:
They build a budget that just covers the bills. But the goal isn’t to break even, it’s to be profitable.

Your budget should help you answer two key questions:
How much profit do I want? And what’s my plan to get there?

• Set a clear profit target.
  Depending on your industry, a healthy net profit margin is usually between 10% and 30%.
  
  
• Make sure you’re paying yourself.
  One of the most common mistakes business owners make is paying themselves last, or not at all. If this business is how you make a living, your salary or owner’s draw needs to be built into the budget.
  
  
• Reinvest for growth.
  Profit isn’t just about personal income. A smart budget sets aside 10–20% of revenue to reinvest back into the business, whether that’s marketing, hiring, equipment, or new products.
  
  
• Create a safety net.
  Even a modest emergency fund can help you weather the unexpected without throwing your whole plan off track.

When you set intentional profit goals, you stop just surviving, and start growing on purpose.

Step 4: Track and Adjust

Your budget isn’t set in stone, it’s a living, breathing roadmap.
It should evolve with your business.

Each month, take time to compare your actual numbers to what you budgeted.

• Are you spending more than expected?
• Are you bringing in more revenue than you planned?

Use those insights to make adjustments.

This regular check-in keeps you grounded in reality and helps you stay on track—so your budget reflects what’s really happening, not just what you hoped would happen.

Step 5: Use Tools That Work for You

Let’s be real, no tool will help if you don’t actually use it.
Don’t waste time chasing the “perfect” budgeting system.

• A simple spreadsheet in Excel or Google Sheets works just fine, as long as you stick with it.
• Tools like QuickBooks can automate tracking and spit out helpful reports.
• Honestly, even a budget scribbled on a napkin is better than nothing... if you actually look at it.

The key? Pick a system you’ll actually check.
All the fancy features in the world won’t matter if you never log in.

Why This Matters

At its core, a budget is not about restriction, it’s about freedom. Freedom to know when you can hire. Freedom to invest in new opportunities. Freedom to stop living in financial uncertainty.

For small business owners, clarity is power. When you understand your numbers, you stop reacting to money and start directing it.

Common Mistakes to Avoid

As a Fractional CFO working with entrepreneurs, I see a few common budgeting mistakes over and over again:

• Overestimating revenue. Optimism is great, but it doesn’t pay the bills. Your numbers need to be grounded in reality, not hope.
• Skipping the owner’s pay. You’re putting in the work, and your compensation deserves to be part of the plan, not an afterthought.
• Neglecting reinvestment. If you’re not setting aside money to grow, your business can easily stall out.
• Treating the budget like a one-and-done task. A budget only works if you check in regularly and make adjustments as things change.

Avoiding these pitfalls will put you ahead of the curve, and set your business up for long-term financial stability.

Bringing It All Together

Here’s a quick recap of the budgeting process:

1. Figure out your revenue, and be conservative with your estimates.
2. List your fixed and variable expenses.
3. Set clear profit goals, including your own pay and money for reinvestment.
4. Track your actual results each month and make adjustments as needed.
5. Choose tools you’ll actually use consistently.

When you follow these steps regularly, budgeting stops feeling like a chore, and starts becoming a real strategy for growth.

Your Next Step

Ready to take the next step?
I’ve created a few resources to help you get clarity and control over your business finances:

👉 Take the free Small Business Owner Assessment
Get a snapshot of where you stand financially, and uncover areas to improve.
alignedimpact.scoreapp.com

👉 Join my live webinar
I’ll walk you through real-world strategies and practical steps to manage your business finances with confidence.
jayboykin.com/webinar

👉 Enroll in my digital course (Beta)
This step-by-step program gives you the tools, templates, and frameworks to master your numbers and grow your business, without the overwhelm.
jayboykin.com/beta

Running a business is hard enough, your finances shouldn’t be another headache.
Let’s make your money work for you.