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How to make a business budget

Managing business finances can be tough, but many business owners find budgets to be one of the best ways to gain valuable insights into the health of their business. While the concept is simple — monitor how money goes in and out — creating a good budget isn’t as easy as it might seem.

No need to fear, though — to help you avoid the pitfalls of bad business budgeting, this guide will cover:

  • Why every business needs a budget

  • What a budget includes

  • A few ways you can better prepare

  • How to apply what you’ve learned

  • Ways to streamline your budgeting

Why every business needs a budget

Whether you’re a startup fresh to the game or an established enterprise, a business budget should be a top priority. Effective budgeting allows businesses to:

  • Confidently set short and long-term business goals

  • Simplify getting finance

  • Understand where finances are better allocated

  • Make decisions with more predictable outcomes

  • Quickly identify and contrast profits with losses.

What a budget includes

On paper, a budget is a measure of the profit and loss a business makes. In practice, however, what your particular budget looks like will depend entirely on your business.

Thankfully, there are still quite a few budget consistencies that are relevant to most businesses. These include:

Fixed costs

Consistent expenses such as rent, payroll, insurance and certain utilities (such as phone and internet bills).

Variable costs

Fluctuating variables like ordered product volumes, casual staff wages, utilities, sales commissions and shipping costs.

Time frame

The time frame relates to the needs of your business, and you might find more success creating either a monthly, quarterly or yearly budget.


Creating a conservative expected business income can help you develop a better understanding of what to prepare for in the future.

A few ways you can better prepare

Before racing off to draw up your budget, there are a few important things you should keep in mind. 

  • Budget planning is about more than predicting a business’s finances. Instead, it’s a way to see where and why money should be allocated in a business. 

  • A good budget uses accurate information to create accurate results, so making assumptions to save a little bit of time can cause a lot of headaches in the long-term.

  • Take your time and be thorough when locating important information, as this will give you the best possible opportunity to understand your business’s finances.

How to apply what you’ve learned

The purpose of a budget is to find key opportunity areas and address them sooner, rather than later. If you locate areas where you are making a loss, consider:

  • Finding areas that'd benefit from reduced expenditure, such as having less staff on quieter days.

  • Focusing on purchasing essentials, rather than superficial or unnecessary business expenses.

If you find that you’re making a profit, you might instead:

  • Look for areas of opportunity where you can grow your business.

  • Pay off outstanding debt.

  • Prepare for unfavourable seasonal downturns.

How to simplify budgeting

One of the best ways to hit the ground running with a budget is by creating a budget template. With the use of a budget spreadsheet, you can make the most of the financial information you have on hand. There are a few other valuable financial reports that can also be used to inform your budget. These include: 

If you’re already swamped with spreadsheets, accounting software can help eliminate budgeting headaches with a feature-set designed to streamline the entire budgeting process. With MYOB, businesses can:

  • Set, manage and edit budgets at any time: track your spending against your sales, set limits at any time and easily edit or create new budgets as your business grows.

  • Easily access important data and graphs: make informed decisions and spot trends through detailed profit and loss, cash flow, balance sheet and performance statements for the year.

  • Reduce errors from manual data entry: connect you bank account to your software and access up-to-date financial information.

Want to better understand your business?

Creating a budget might seem like a chore, but in practice it’s one of the best things you can do for your business. By pinpointing areas of profitability and loss and quickly addressing needs as they arise, you’ll be able to provide your business with the health it needs to flourish. 

Try MYOB FREE for 30 days.

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