In his book Profit First, Mike Michalowicz writes that 83% of small businesses operate on a “check-to-check” basis, meaning they don't have enough cash flow to cover their expenses from one payment cycle to the next.
Considering that 74% of small business owners have reported an increase in costs due to inflation, things probably won’t get any easier soon. That doesn’t mean there’s no way out, though. If these sound like your current challenges, a solid business budget template is the best gift for your small business for 2025.
A business budget template helps companies monitor, track and manage their revenue and expenses over a certain period, e.g., a month, quarter or year. Think of it as a compass that helps you navigate financial decisions.
The short answer is—to manage your finances effectively. A well-structured business budget template will help you make a realistic budget by giving you categories for different expense types. Let's take a food truck business as an example.
Its template includes categories like ingredient costs, fuel expenses and maintenance. If the business allocates $1,500 for food supplies according to current prices but spends $2,000, the owner should probably investigate the reasons for the increase. Similarly, you should plan labor costs and other expenses to be able to see if you can afford them and make a profit. Plus, plan vs actual variations allow you to adapt the staffing strategy and food spending better in the future.
Inaccurate data collection, unpredictable market conditions and limited cash flow—all of this makes creating a small business budget a dull and intimidating task. It seems confusing at first, but you’ll soon get the hang of it.
This is where Fuelfinance comes in, making your life simpler. Fuelfinance is a cloud-based small business financial management tool made to help SMBs and startups. How? For example, most small business owners struggle to create accurate budgets, which leads to overspending. As a financial planning software tool, Fuelfinance helps you create a realistic business budget based on past financial data pulled automatically.
Maybe you have trouble predicting cash flow, making it difficult to plan for unexpected expenses. This can strain your small business budget. Fuelfinance uses algorithms to help you visualize your cash flow and make adjustments if necessary.
Plus, Fuelfinance automatically generates financial reports with data pulled from your accounting software, allowing you to focus on your business strategy.
Now, let's take a look at what you need to do to create your small business budget.
Any architect will tell you that nothing can last without a solid foundation. So, it’s best to make one before you start creating your budget. Here’s how:
Yes, you need two budgeting scenarios to be ready for different financial outcomes:
Take a look at how you can figure out your baseline scenario:
Here is how you can make your ideal scenario come true:
Choose the right strategy depending on which business stage your company is in. Below, you will find a table that will help you pick your budget depending on where you currently are.
Now, let’s dive into the six profit-first business budget hacks that will help you come out with a profit, no matter your current situation.
Instead of the traditional approach which states that Profit = Revenue - Expenses. Use this one instead:
Revenue - Profit = Expenses
This way, you ensure you achieve your profit goals before you spend on other costs. Let’s see an example:
This means you should minimize your expenses to $80,000 to hit the $20,000 target.
The “small plates” method is a budgeting strategy that helps you break down your business finances into manageable chunks. For example, if employee salaries are $150,000, break them down into bite-sized pieces, like admin staff, sales team and management salaries. This is an effective method that makes financial management much simpler.
By doing a cash flow check twice per month, you give yourself more financial control. This means you don’t get surprises after a full month (or worse yet—a couple of months). A cash flow check helps you by:
Read also: Cash Flow Forecast & Planning: a Step-by-step Guide
The Pareto principle states that 80% of your income comes from 20% of your clients. Identify those key revenue streams and give them most of your attention to maximize profitability. You can find those revenue streams by:
Keep your profits account in a separate bank and out of easy reach. This way, you won’t be tempted to spend money on something you may not need. If you don’t spend your money immediately, you can reinvest it into your business by, for example, upgrading your technology. This way, you also create a financial cushion. If you come across some unexpected expenses or low income periods your company can remain stable and operational.
Before paying any bills, distribute your money to your Profit, Tax and Owner's comp accounts first. If you realize there’s not enough left to cover expenses, it's time to start cost-cutting. Focus on reducing variable costs and cutting unnecessary expenses like expensive office spaces, frequent travel or non-essential training programs to stay within your budget.
The main idea behind Fuelfinance is to make the lives of small business owners easier. It relies on the simplicity and familiarity of Google Sheets and a simple dashboard design to help you create your small business budget—and more.
The star of the show is our all-in-one dashboard that imports all important metrics from your accounting via a QuickBooks integration. This lets you see all your business finances in one place; that way, you can easily monitor KPIs tailored to your specific business model. It's updated in real time, so you can say goodbye to manual updates.
See also: 31 Agency Metrics & KPIs to Stay Profitable + Cheat Sheet
You get three main financial statements: the Profit & Loss Statement, Balance Sheet and Cash Flow Statement. Fuelfinance gives you quick access to revenue streams and operating expenses. This way, financial reporting is much easier since you focus on analyzing the data instead of doing the calculations.
See also: Best Financial Reporting Software & Tools: Our Top 6 Picks
A key benefit of Fuelfinance is the expert financial support we provide. You can contact a dedicated financial specialist who helps you identify cash flow problems. They act as your outsourced CFO, finding areas for improvement and helping you optimize your small business budget.
To optimize your budget, you need to understand Plan vs. Actual analysis. This compares your projected outcomes (the plan) with the actual results (the actual). Fuelfinance gives you the tools to do the plan vs. actual analysis efficiently by offering:
We also created Bootstrap—a free financial management system for early-stage startups. If you’re trying to take your business off the ground, finances might be intimidating and time-consuming.
With Bootstrap, you get important features like profit and loss statements (P&L), cash flow analysis, and helpful tips on how to manage them. It's very intuitive and easy to use, so people without financial backgrounds won't have problems navigating it.
Ready for financial peace of mind?
Making a stable and efficient financial model doesn't have to be a headache. It might look like that at first glance, especially if you are a startup or a small business, but we’re here to help.
Fuelfinance is a user-friendly financial app made specifically to make business budgeting simple and help you reach financial health, or better yet—your financial goals. With dedicated support from financial experts, we make sure you have support whenever you need it. By choosing Fuelfinance, you're not just choosing software; you're partnering with a tool that grows alongside your business.
Start your financial smooth sailing today. Book a demo here.
To make a budget sheet for your business, get your past financial data like business income and business expenses. Categorize them into fixed costs and variable costs, then calculate total revenue and subtract expenses to determine profit or loss. Then, input your projected revenue and subtract total expenses to see your expected profit or loss.
This means that 50% of your business income goes to essential expenses, like fixed costs (e.g., employee wages), 30% to development (e.g., marketing costs and business investments) and 20% to unexpected expenses and financial obligations.
To write a budget for your business, start by figuring out your target revenue based on historical data and market research. Next, divide expenses into fixed (like salaries) and variable costs (such as marketing costs and supplies). Subtract your total expenses from your projected revenue to figure out your expected profit or loss. Using Fuelfinance can simplify the budgeting process for your small business.
Yes, there are several free business budget templates for Excel you can find online. They typically include sections for income, fixed costs and variable expenses and allow you to track your financial performance.
